Correlation Between Cogeco Communications and CCL Industries

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Cogeco Communications and CCL Industries 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 Cogeco Communications and CCL Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cogeco Communications and CCL Industries, you can compare the effects of market volatilities on Cogeco Communications and CCL Industries 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 Cogeco Communications with a short position of CCL Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogeco Communications and CCL Industries.

Diversification Opportunities for Cogeco Communications and CCL Industries

0.34
  Correlation Coefficient

Weak diversification

The 3 months correlation between Cogeco and CCL is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Cogeco Communications and CCL Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCL Industries and Cogeco Communications 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 Cogeco Communications are associated (or correlated) with CCL Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CCL Industries has no effect on the direction of Cogeco Communications i.e., Cogeco Communications and CCL Industries go up and down completely randomly.

Pair Corralation between Cogeco Communications and CCL Industries

Assuming the 90 days trading horizon Cogeco Communications is expected to generate 1.11 times more return on investment than CCL Industries. However, Cogeco Communications is 1.11 times more volatile than CCL Industries. It trades about 0.18 of its potential returns per unit of risk. CCL Industries is currently generating about -0.01 per unit of risk. If you would invest  6,425  in Cogeco Communications on September 5, 2024 and sell it today you would earn a total of  914.00  from holding Cogeco Communications or generate 14.23% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Cogeco Communications  vs.  CCL Industries

 Performance 
       Timeline  
Cogeco Communications 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Cogeco Communications are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Cogeco Communications displayed solid returns over the last few months and may actually be approaching a breakup point.
CCL Industries 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days CCL Industries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, CCL Industries is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Cogeco Communications and CCL Industries Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Cogeco Communications and CCL Industries

The main advantage of trading using opposite Cogeco Communications and CCL Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cogeco Communications position performs unexpectedly, CCL Industries 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 CCL Industries will offset losses from the drop in CCL Industries' long position.
The idea behind Cogeco Communications and CCL Industries 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.

Other Complementary Tools

Piotroski F Score
Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
Correlation Analysis
Reduce portfolio risk simply by holding instruments which are not perfectly correlated