Correlation Between Sinopharm Group and Cogent Communications
Can any of the company-specific risk be diversified away by investing in both Sinopharm Group 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 Sinopharm Group and Cogent Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sinopharm Group Co and Cogent Communications Holdings, you can compare the effects of market volatilities on Sinopharm Group 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 Sinopharm Group with a short position of Cogent Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinopharm Group and Cogent Communications.
Diversification Opportunities for Sinopharm Group and Cogent Communications
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sinopharm and Cogent is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Sinopharm Group Co and Cogent Communications Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogent Communications and Sinopharm Group 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 Sinopharm Group Co 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 Sinopharm Group i.e., Sinopharm Group and Cogent Communications go up and down completely randomly.
Pair Corralation between Sinopharm Group and Cogent Communications
Assuming the 90 days horizon Sinopharm Group Co is expected to generate 1.66 times more return on investment than Cogent Communications. However, Sinopharm Group is 1.66 times more volatile than Cogent Communications Holdings. It trades about 0.07 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 103.00 in Sinopharm Group Co on September 14, 2024 and sell it today you would earn a total of 153.00 from holding Sinopharm Group Co or generate 148.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sinopharm Group Co vs. Cogent Communications Holdings
Performance |
| Timeline |
| Sinopharm Group |
| Cogent Communications |
Sinopharm Group and Cogent Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinopharm Group and Cogent Communications
The main advantage of trading using opposite Sinopharm Group and Cogent Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinopharm Group 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.| Sinopharm Group vs. Cogent Communications Holdings | Sinopharm Group vs. Shenandoah Telecommunications | Sinopharm Group vs. Gamma Communications plc | Sinopharm Group vs. Gold Road Resources |
| Cogent Communications vs. Superior Plus Corp | Cogent Communications vs. SIVERS SEMICONDUCTORS AB | Cogent Communications vs. Norsk Hydro ASA | Cogent Communications vs. Reliance Steel Aluminum |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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