Correlation Between Datang International and Cogent Communications
Can any of the company-specific risk be diversified away by investing in both Datang International 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 Datang International and Cogent Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Datang International Power and Cogent Communications Holdings, you can compare the effects of market volatilities on Datang International 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 Datang International with a short position of Cogent Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Datang International and Cogent Communications.
Diversification Opportunities for Datang International and Cogent Communications
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Datang and Cogent is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Datang International Power and Cogent Communications Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogent Communications and Datang International 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 Datang International Power 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 Datang International i.e., Datang International and Cogent Communications go up and down completely randomly.
Pair Corralation between Datang International and Cogent Communications
Assuming the 90 days horizon Datang International Power is expected to generate 1.64 times more return on investment than Cogent Communications. However, Datang International is 1.64 times more volatile than Cogent Communications Holdings. It trades about 0.04 of its potential returns per unit of risk. Cogent Communications Holdings is currently generating about -0.13 per unit of risk. If you would invest 17.00 in Datang International Power on December 28, 2024 and sell it today you would earn a total of 1.00 from holding Datang International Power or generate 5.88% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Datang International Power vs. Cogent Communications Holdings
Performance |
Timeline |
Datang International |
Cogent Communications |
Datang International and Cogent Communications Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Datang International and Cogent Communications
The main advantage of trading using opposite Datang International and Cogent Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Datang International 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.Datang International vs. United Airlines Holdings | Datang International vs. American Airlines Group | Datang International vs. Eidesvik Offshore ASA | Datang International vs. SBM OFFSHORE |
Cogent Communications vs. T Mobile | Cogent Communications vs. ATT Inc | Cogent Communications vs. Deutsche Telekom AG | Cogent Communications vs. Deutsche Telekom AG |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
CEOs Directory Screen CEOs from public companies around the world | |
Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
Analyst Advice Analyst recommendations and target price estimates broken down by several categories |