Correlation Between COG Financial and Infomedia

Can any of the company-specific risk be diversified away by investing in both COG Financial and Infomedia 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 Infomedia 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 Infomedia, you can compare the effects of market volatilities on COG Financial and Infomedia 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 Infomedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of COG Financial and Infomedia.

Diversification Opportunities for COG Financial and Infomedia

0.44

Correlation Coefficient

COG Financial  Infomedia

Very weak diversification

The 3 months correlation between COG and Infomedia is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding COG Financial Services and Infomedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infomedia 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 Infomedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infomedia has no effect on the direction of COG Financial i.e., COG Financial and Infomedia go up and down completely randomly.

Pair Corralation between COG Financial and Infomedia

Assuming the 90 days trading horizon COG Financial Services is expected to generate 0.83 times more return on investment than Infomedia. However, COG Financial Services is 1.2 times less risky than Infomedia. It trades about 0.23 of its potential returns per unit of risk. Infomedia is currently generating about 0.0 per unit of risk. If you would invest  91.00  in COG Financial Services on October 11, 2024 and sell it today you would earn a total of  10.00  from holding COG Financial Services or generate 10.99% return on investment over 90 days.

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

COG Financial Services  vs.  Infomedia

COG Financial Services

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in COG Financial Services are ranked lower than 2 (%) 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 newest stock price uproar, may contribute to short-horizon losses for the private investors.

Infomedia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Infomedia has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's primary indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with COG Financial and Infomedia

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

The idea behind COG Financial Services and Infomedia 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.