Correlation Between Uniteds and Cogeco
Can any of the company-specific risk be diversified away by investing in both Uniteds and Cogeco 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 Uniteds and Cogeco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Uniteds Limited and Cogeco Inc, you can compare the effects of market volatilities on Uniteds and Cogeco 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 Uniteds with a short position of Cogeco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uniteds and Cogeco.
Diversification Opportunities for Uniteds and Cogeco
Excellent diversification
The 3 months correlation between Uniteds and Cogeco is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Uniteds Limited and Cogeco Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogeco Inc and Uniteds 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 Uniteds Limited are associated (or correlated) with Cogeco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cogeco Inc has no effect on the direction of Uniteds i.e., Uniteds and Cogeco go up and down completely randomly.
Pair Corralation between Uniteds and Cogeco
Assuming the 90 days trading horizon Uniteds Limited is expected to generate 0.71 times more return on investment than Cogeco. However, Uniteds Limited is 1.41 times less risky than Cogeco. It trades about 0.21 of its potential returns per unit of risk. Cogeco Inc is currently generating about -0.14 per unit of risk. If you would invest 13,150 in Uniteds Limited on November 9, 2024 and sell it today you would earn a total of 996.00 from holding Uniteds Limited or generate 7.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Uniteds Limited vs. Cogeco Inc
Performance |
| Timeline |
| Uniteds Limited |
| Cogeco Inc |
Uniteds and Cogeco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Uniteds and Cogeco
The main advantage of trading using opposite Uniteds and Cogeco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uniteds position performs unexpectedly, Cogeco 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 will offset losses from the drop in Cogeco's long position.| Uniteds vs. Economic Investment Trust | Uniteds vs. Canadian General Investments | Uniteds vs. E L Financial Corp | Uniteds vs. Clairvest Group |
| Cogeco vs. Cogeco Communications | Cogeco vs. Quebecor | Cogeco vs. Transcontinental | Cogeco 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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