Correlation Between Xtract One and Cogeco Communications
Can any of the company-specific risk be diversified away by investing in both Xtract One 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 Xtract One and Cogeco Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtract One Technologies and Cogeco Communications, you can compare the effects of market volatilities on Xtract One 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 Xtract One with a short position of Cogeco Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtract One and Cogeco Communications.
Diversification Opportunities for Xtract One and Cogeco Communications
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xtract and Cogeco is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Xtract One Technologies and Cogeco Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogeco Communications and Xtract One 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 Xtract One Technologies 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 Xtract One i.e., Xtract One and Cogeco Communications go up and down completely randomly.
Pair Corralation between Xtract One and Cogeco Communications
Assuming the 90 days trading horizon Xtract One Technologies is expected to under-perform the Cogeco Communications. In addition to that, Xtract One is 1.48 times more volatile than Cogeco Communications. It trades about -0.12 of its total potential returns per unit of risk. Cogeco Communications is currently generating about 0.15 per unit of volatility. If you would invest 6,903 in Cogeco Communications on September 4, 2024 and sell it today you would earn a total of 306.00 from holding Cogeco Communications or generate 4.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtract One Technologies vs. Cogeco Communications
Performance |
| Timeline |
| Xtract One Technologies |
| Cogeco Communications |
Xtract One and Cogeco Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtract One and Cogeco Communications
The main advantage of trading using opposite Xtract One and Cogeco Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtract One 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.| Xtract One vs. Cogeco Communications | Xtract One vs. Chemtrade Logistics Income | Xtract One vs. American Hotel Income | Xtract One vs. Primaris Retail RE |
| 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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