Correlation Between United Natural and Cogent Communications
Can any of the company-specific risk be diversified away by investing in both United Natural 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 United Natural and Cogent Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Natural Foods and Cogent Communications Holdings, you can compare the effects of market volatilities on United Natural 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 United Natural with a short position of Cogent Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Natural and Cogent Communications.
Diversification Opportunities for United Natural and Cogent Communications
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between United and Cogent is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding United Natural Foods and Cogent Communications Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogent Communications and United Natural 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 United Natural Foods 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 United Natural i.e., United Natural and Cogent Communications go up and down completely randomly.
Pair Corralation between United Natural and Cogent Communications
Assuming the 90 days horizon United Natural Foods is expected to under-perform the Cogent Communications. In addition to that, United Natural is 1.4 times more volatile than Cogent Communications Holdings. It trades about -0.08 of its total potential returns per unit of risk. Cogent Communications Holdings is currently generating about 0.01 per unit of volatility. If you would invest 7,200 in Cogent Communications Holdings on October 11, 2024 and sell it today you would earn a total of 0.00 from holding Cogent Communications Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Natural Foods vs. Cogent Communications Holdings
Performance |
| Timeline |
| United Natural Foods |
| Cogent Communications |
United Natural and Cogent Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Natural and Cogent Communications
The main advantage of trading using opposite United Natural and Cogent Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Natural 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.| United Natural vs. Austevoll Seafood ASA | United Natural vs. THAI BEVERAGE | United Natural vs. Endeavour Mining PLC | United Natural vs. SENECA FOODS A |
| Cogent Communications vs. United Natural Foods | Cogent Communications vs. Japan Asia Investment | Cogent Communications vs. MidCap Financial Investment | Cogent Communications vs. EBRO FOODS |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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