Correlation Between Cogeco Communications and Wildsky Resources

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

By analyzing existing cross correlation between Cogeco Communications and Wildsky Resources, you can compare the effects of market volatilities on Cogeco Communications and Wildsky Resources 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 Wildsky Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogeco Communications and Wildsky Resources.

Diversification Opportunities for Cogeco Communications and Wildsky Resources

-0.43

Correlation Coefficient

Cogeco Communications  Wildsky Resources

Very good diversification

The 3 months correlation between Cogeco and Wildsky is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Cogeco Communications and Wildsky Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wildsky Resources 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 Wildsky Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wildsky Resources has no effect on the direction of Cogeco Communications i.e., Cogeco Communications and Wildsky Resources go up and down completely randomly.

Pair Corralation between Cogeco Communications and Wildsky Resources

If you would invest  6,007  in Cogeco Communications on December 5, 2024 and sell it today you would earn a total of  488.00  from holding Cogeco Communications or generate 8.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Cogeco Communications  vs.  Wildsky Resources

Cogeco Communications

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cogeco Communications has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Wildsky Resources

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Wildsky Resources are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Wildsky Resources showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cogeco Communications and Wildsky Resources

The main advantage of trading using opposite Cogeco Communications and Wildsky Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cogeco Communications position performs unexpectedly, Wildsky Resources 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 Wildsky Resources will offset losses from the drop in Wildsky Resources' long position.

The idea behind Cogeco Communications and Wildsky Resources 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.

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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.