Correlation Between COG Financial and ASX

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

By analyzing existing cross correlation between COG Financial Services and ASX, you can compare the effects of market volatilities on COG Financial and ASX 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 COG Financial with a short position of ASX. Check out your portfolio center. Please also check ongoing floating volatility patterns of COG Financial and ASX.

Diversification Opportunities for COG Financial and ASX

0.0

Correlation Coefficient

COG Financial  ASX

Pay attention - limited upside

The 3 months correlation between COG and ASX is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding COG Financial Services and ASX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASX and COG Financial 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 COG Financial Services are associated (or correlated) with ASX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASX has no effect on the direction of COG Financial i.e., COG Financial and ASX go up and down completely randomly.

Pair Corralation between COG Financial and ASX

If you would invest  96.00  in COG Financial Services on October 4, 2024 and sell it today you would earn a total of  4.00  from holding COG Financial Services or generate 4.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.61%
Values	Daily Returns

COG Financial Services  vs.  ASX

COG Financial Services

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in COG Financial Services are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, COG Financial is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

ASX

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ASX are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, ASX is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with COG Financial and ASX

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

The idea behind COG Financial Services and ASX 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.