Correlation Between EEDUCATION ALBERT and Cogent Communications

Can any of the company-specific risk be diversified away by investing in both EEDUCATION ALBERT 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 EEDUCATION ALBERT and Cogent Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between EEDUCATION ALBERT AB and Cogent Communications Holdings, you can compare the effects of market volatilities on EEDUCATION ALBERT 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 EEDUCATION ALBERT with a short position of Cogent Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of EEDUCATION ALBERT and Cogent Communications.

Diversification Opportunities for EEDUCATION ALBERT and Cogent Communications

0.0

Correlation Coefficient

EEDUCATION ALBERT  Cogent Communications

Pay attention - limited upside

The 3 months correlation between EEDUCATION and Cogent is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding EEDUCATION ALBERT AB and Cogent Communications Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogent Communications and EEDUCATION ALBERT 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 EEDUCATION ALBERT AB 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 EEDUCATION ALBERT i.e., EEDUCATION ALBERT and Cogent Communications go up and down completely randomly.

Pair Corralation between EEDUCATION ALBERT and Cogent Communications

If you would invest  5,827  in Cogent Communications Holdings on September 24, 2024 and sell it today you would earn a total of  1,473  from holding Cogent Communications Holdings or generate 25.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.41%
Values	Daily Returns

EEDUCATION ALBERT AB  vs.  Cogent Communications Holdings

EEDUCATION ALBERT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EEDUCATION ALBERT AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, EEDUCATION ALBERT is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Cogent Communications

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cogent Communications Holdings are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, Cogent Communications may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with EEDUCATION ALBERT and Cogent Communications

The main advantage of trading using opposite EEDUCATION ALBERT and Cogent Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EEDUCATION ALBERT 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.

The idea behind EEDUCATION ALBERT AB and Cogent Communications Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.