Correlation Between TOKYO GAS and Cogent Communications
Can any of the company-specific risk be diversified away by investing in both TOKYO GAS 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 TOKYO GAS and Cogent Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TOKYO GAS and Cogent Communications Holdings, you can compare the effects of market volatilities on TOKYO GAS 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 TOKYO GAS with a short position of Cogent Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of TOKYO GAS and Cogent Communications.
Diversification Opportunities for TOKYO GAS and Cogent Communications
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between TOKYO and Cogent is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding TOKYO GAS and Cogent Communications Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogent Communications and TOKYO GAS 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 TOKYO GAS 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 TOKYO GAS i.e., TOKYO GAS and Cogent Communications go up and down completely randomly.
Pair Corralation between TOKYO GAS and Cogent Communications
Assuming the 90 days trading horizon TOKYO GAS is expected to generate 0.97 times more return on investment than Cogent Communications. However, TOKYO GAS is 1.03 times less risky than Cogent Communications. It trades about 0.06 of its potential returns per unit of risk. Cogent Communications Holdings is currently generating about 0.05 per unit of risk. If you would invest 2,120 in TOKYO GAS on August 28, 2024 and sell it today you would earn a total of 580.00 from holding TOKYO GAS or generate 27.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TOKYO GAS vs. Cogent Communications Holdings
Performance |
| Timeline |
| TOKYO GAS |
| Cogent Communications |
TOKYO GAS and Cogent Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TOKYO GAS and Cogent Communications
The main advantage of trading using opposite TOKYO GAS and Cogent Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TOKYO GAS 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.| TOKYO GAS vs. GAMING FAC SA | TOKYO GAS vs. GameStop Corp | TOKYO GAS vs. PLAYTIKA HOLDING DL 01 | TOKYO GAS vs. LG Display Co |
| Cogent Communications vs. T Mobile | Cogent Communications vs. ATT Inc | Cogent Communications vs. Deutsche Telekom AG |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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