Correlation Between TIANDE CHEMICAL and Cogent Communications
Can any of the company-specific risk be diversified away by investing in both TIANDE CHEMICAL and Cogent 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 TIANDE CHEMICAL and Cogent Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TIANDE CHEMICAL and Cogent Communications Holdings, you can compare the effects of market volatilities on TIANDE CHEMICAL 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 TIANDE CHEMICAL with a short position of Cogent Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of TIANDE CHEMICAL and Cogent Communications.
Diversification Opportunities for TIANDE CHEMICAL and Cogent Communications
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between TIANDE and Cogent is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding TIANDE CHEMICAL and Cogent Communications Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogent Communications and TIANDE CHEMICAL 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 TIANDE CHEMICAL 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 TIANDE CHEMICAL i.e., TIANDE CHEMICAL and Cogent Communications go up and down completely randomly.
Pair Corralation between TIANDE CHEMICAL and Cogent Communications
If you would invest 7.25 in TIANDE CHEMICAL on September 12, 2024 and sell it today you would earn a total of 0.00 from holding TIANDE CHEMICAL or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
TIANDE CHEMICAL vs. Cogent Communications Holdings
Performance |
| Timeline |
| TIANDE CHEMICAL |
| Cogent Communications |
TIANDE CHEMICAL and Cogent Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TIANDE CHEMICAL and Cogent Communications
The main advantage of trading using opposite TIANDE CHEMICAL and Cogent Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TIANDE CHEMICAL 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.| TIANDE CHEMICAL vs. Summit Hotel Properties | TIANDE CHEMICAL vs. MELIA HOTELS | TIANDE CHEMICAL vs. Japan Tobacco | TIANDE CHEMICAL vs. Host Hotels Resorts |
| Cogent Communications vs. Superior Plus Corp | Cogent Communications vs. SIVERS SEMICONDUCTORS AB | Cogent Communications vs. Norsk Hydro ASA | Cogent Communications vs. Reliance Steel Aluminum |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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