Correlation Between Stella Jones and Cogeco
Can any of the company-specific risk be diversified away by investing in both Stella Jones and Cogeco 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 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 Inc, you can compare the effects of market volatilities on Stella Jones and Cogeco 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. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stella Jones and Cogeco.
Diversification Opportunities for Stella Jones and Cogeco
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Stella and Cogeco is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Stella Jones and Cogeco Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogeco Inc 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. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cogeco Inc has no effect on the direction of Stella Jones i.e., Stella Jones and Cogeco go up and down completely randomly.
Pair Corralation between Stella Jones and Cogeco
Assuming the 90 days horizon Stella Jones is expected to generate 1.19 times more return on investment than Cogeco. However, Stella Jones is 1.19 times more volatile than Cogeco Inc. It trades about 0.05 of its potential returns per unit of risk. Cogeco Inc is currently generating about 0.01 per unit of risk. If you would invest 4,774 in Stella Jones on November 2, 2024 and sell it today you would earn a total of 2,336 from holding Stella Jones or generate 48.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Stella Jones vs. Cogeco Inc
Performance |
| Timeline |
| Stella Jones |
| Cogeco Inc |
Stella Jones and Cogeco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stella Jones and Cogeco
The main advantage of trading using opposite Stella Jones and Cogeco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stella Jones position performs unexpectedly, Cogeco 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 will offset losses from the drop in Cogeco's long position.| Stella Jones vs. Richelieu Hardware | Stella Jones vs. CCL Industries | Stella Jones vs. Stantec | Stella Jones vs. Gildan Activewear |
| Cogeco vs. Cogeco Communications | Cogeco vs. Quebecor | Cogeco vs. Transcontinental | Cogeco vs. Stella Jones |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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