Correlation Between ATT and Cogent Communications
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By analyzing existing cross correlation between ATT Inc and Cogent Communications Holdings, you can compare the effects of market volatilities on ATT and Cogent 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 ATT with a short position of Cogent Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and Cogent Communications.
Diversification Opportunities for ATT and Cogent Communications
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ATT and Cogent is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and Cogent Communications Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogent Communications and ATT 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 ATT Inc are associated (or correlated) with Cogent Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cogent Communications has no effect on the direction of ATT i.e., ATT and Cogent Communications go up and down completely randomly.
Pair Corralation between ATT and Cogent Communications
Assuming the 90 days trading horizon ATT is expected to generate 1.17 times less return on investment than Cogent Communications. But when comparing it to its historical volatility, ATT Inc is 1.66 times less risky than Cogent Communications. It trades about 0.23 of its potential returns per unit of risk. Cogent Communications Holdings is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 7,209 in Cogent Communications Holdings on September 1, 2024 and sell it today you would earn a total of 541.00 from holding Cogent Communications Holdings or generate 7.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ATT Inc vs. Cogent Communications Holdings
Performance |
| Timeline |
| ATT Inc |
| Cogent Communications |
ATT and Cogent Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATT and Cogent Communications
The main advantage of trading using opposite ATT and Cogent Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, Cogent 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 Cogent Communications will offset losses from the drop in Cogent Communications' long position.The idea behind ATT Inc and Cogent Communications Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Cogent Communications vs. Perma Fix Environmental Services | Cogent Communications vs. Nippon Steel | Cogent Communications vs. Insteel Industries | Cogent Communications vs. Caltagirone SpA |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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