Correlation Between WildBrain and Cogeco Communications
Can any of the company-specific risk be diversified away by investing in both WildBrain 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 WildBrain and Cogeco Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WildBrain and Cogeco Communications, you can compare the effects of market volatilities on WildBrain 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 WildBrain with a short position of Cogeco Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of WildBrain and Cogeco Communications.
Diversification Opportunities for WildBrain and Cogeco Communications
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between WildBrain and Cogeco is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding WildBrain and Cogeco Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogeco Communications and WildBrain 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 WildBrain 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 WildBrain i.e., WildBrain and Cogeco Communications go up and down completely randomly.
Pair Corralation between WildBrain and Cogeco Communications
Assuming the 90 days trading horizon WildBrain is expected to under-perform the Cogeco Communications. In addition to that, WildBrain is 2.5 times more volatile than Cogeco Communications. It trades about -0.04 of its total potential returns per unit of risk. Cogeco Communications is currently generating about 0.01 per unit of volatility. If you would invest 6,792 in Cogeco Communications on September 4, 2024 and sell it today you would earn a total of 238.00 from holding Cogeco Communications or generate 3.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WildBrain vs. Cogeco Communications
Performance |
| Timeline |
| WildBrain |
| Cogeco Communications |
WildBrain and Cogeco Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WildBrain and Cogeco Communications
The main advantage of trading using opposite WildBrain and Cogeco Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WildBrain 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.| WildBrain vs. Arbor Metals Corp | WildBrain vs. Queens Road Capital | WildBrain vs. Intact Financial Corp | WildBrain vs. US Financial 15 |
| 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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