Correlation Between Talon Metals and Cogeco Communications
Can any of the company-specific risk be diversified away by investing in both Talon Metals 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 Talon Metals and Cogeco Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Talon Metals Corp and Cogeco Communications, you can compare the effects of market volatilities on Talon Metals 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 Talon Metals with a short position of Cogeco Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Talon Metals and Cogeco Communications.
Diversification Opportunities for Talon Metals and Cogeco Communications
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Talon and Cogeco is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Talon Metals Corp and Cogeco Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogeco Communications and Talon Metals 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 Talon Metals Corp 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 Talon Metals i.e., Talon Metals and Cogeco Communications go up and down completely randomly.
Pair Corralation between Talon Metals and Cogeco Communications
Assuming the 90 days trading horizon Talon Metals Corp is expected to under-perform the Cogeco Communications. In addition to that, Talon Metals is 2.99 times more volatile than Cogeco Communications. It trades about -0.12 of its total potential returns per unit of risk. Cogeco Communications is currently generating about 0.17 per unit of volatility. If you would invest 5,213 in Cogeco Communications on September 1, 2024 and sell it today you would earn a total of 1,787 from holding Cogeco Communications or generate 34.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Talon Metals Corp vs. Cogeco Communications
Performance |
| Timeline |
| Talon Metals Corp |
| Cogeco Communications |
Talon Metals and Cogeco Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Talon Metals and Cogeco Communications
The main advantage of trading using opposite Talon Metals and Cogeco Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Talon Metals 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.| Talon Metals vs. Kiplin Metals | Talon Metals vs. Pure Energy Minerals | Talon Metals vs. Noram Lithium Corp | Talon Metals vs. Minnova Corp |
| Cogeco Communications vs. Cogeco Inc | Cogeco Communications vs. Quebecor | Cogeco Communications vs. Transcontinental | Cogeco Communications 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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