Correlation Between Stella Jones and Cogeco Communications
Can any of the company-specific risk be diversified away by investing in both Stella Jones and Cogeco Communications at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Stella Jones and Cogeco Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stella Jones and Cogeco Communications, you can compare the effects of market volatilities on Stella Jones and Cogeco Communications and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Stella Jones with a short position of Cogeco Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stella Jones and Cogeco Communications.
Diversification Opportunities for Stella Jones and Cogeco Communications
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Stella and Cogeco is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Stella Jones and Cogeco Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogeco Communications and Stella Jones is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Stella Jones are associated (or correlated) with Cogeco Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cogeco Communications has no effect on the direction of Stella Jones i.e., Stella Jones and Cogeco Communications go up and down completely randomly.
Pair Corralation between Stella Jones and Cogeco Communications
Assuming the 90 days horizon Stella Jones is expected to under-perform the Cogeco Communications. In addition to that, Stella Jones is 3.75 times more volatile than Cogeco Communications. It trades about -0.24 of its total potential returns per unit of risk. Cogeco Communications is currently generating about -0.07 per unit of volatility. If you would invest 6,965 in Cogeco Communications on August 28, 2024 and sell it today you would lose (102.00) from holding Cogeco Communications or give up 1.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stella Jones vs. Cogeco Communications
Performance |
| Timeline |
| Stella Jones |
| Cogeco Communications |
Stella Jones and Cogeco Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stella Jones and Cogeco Communications
The main advantage of trading using opposite Stella Jones and Cogeco Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stella Jones position performs unexpectedly, Cogeco Communications can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Cogeco Communications will offset losses from the drop in Cogeco Communications' long position.| Stella Jones vs. First Majestic Silver | Stella Jones vs. Ivanhoe Energy | Stella Jones vs. Orezone Gold Corp | Stella Jones vs. Faraday Copper Corp |
| Cogeco Communications vs. Alphabet Inc CDR | Cogeco Communications vs. Microsoft Corp CDR | Cogeco Communications vs. NVIDIA CDR | Cogeco Communications vs. Tesla Inc CDR |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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