Correlation Between AURUBIS - and Cogent Communications

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

By analyzing existing cross correlation between AURUBIS Dusseldorf and Cogent Communications Holdings, you can compare the effects of market volatilities on AURUBIS - 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 AURUBIS - with a short position of Cogent Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of AURUBIS - and Cogent Communications.

Diversification Opportunities for AURUBIS - and Cogent Communications

-0.32

Correlation Coefficient

AURUBIS -  Cogent Communications

Very good diversification

The 3 months correlation between AURUBIS and Cogent is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding AURUBIS Dusseldorf and Cogent Communications Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogent Communications and AURUBIS - 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 AURUBIS Dusseldorf 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 AURUBIS - i.e., AURUBIS - and Cogent Communications go up and down completely randomly.

Pair Corralation between AURUBIS - and Cogent Communications

Assuming the 90 days trading horizon AURUBIS Dusseldorf is expected to generate 0.93 times more return on investment than Cogent Communications. However, AURUBIS Dusseldorf is 1.08 times less risky than Cogent Communications. It trades about 0.13 of its potential returns per unit of risk. Cogent Communications Holdings is currently generating about -0.07 per unit of risk. If you would invest  7,750  in AURUBIS Dusseldorf on December 21, 2024 and sell it today you would earn a total of  1,190  from holding AURUBIS Dusseldorf or generate 15.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

AURUBIS Dusseldorf  vs.  Cogent Communications Holdings

AURUBIS Dusseldorf

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AURUBIS Dusseldorf are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, AURUBIS - unveiled solid returns over the last few months and may actually be approaching a breakup point.

Cogent Communications

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cogent Communications Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's primary indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with AURUBIS - and Cogent Communications

The main advantage of trading using opposite AURUBIS - and Cogent Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AURUBIS - 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.

The idea behind AURUBIS Dusseldorf and Cogent Communications Holdings 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.