Correlation Between Cogent Communications and ATOSS SOFTWARE

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

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

Diversification Opportunities for Cogent Communications and ATOSS SOFTWARE

-0.55

Correlation Coefficient

Cogent Communications  ATOSS SOFTWARE

Excellent diversification

The 3 months correlation between Cogent and ATOSS is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Cogent Communications Holdings and ATOSS SOFTWARE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATOSS SOFTWARE and Cogent 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 Cogent Communications Holdings are associated (or correlated) with ATOSS SOFTWARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATOSS SOFTWARE has no effect on the direction of Cogent Communications i.e., Cogent Communications and ATOSS SOFTWARE go up and down completely randomly.

Pair Corralation between Cogent Communications and ATOSS SOFTWARE

Assuming the 90 days trading horizon Cogent Communications Holdings is expected to under-perform the ATOSS SOFTWARE. In addition to that, Cogent Communications is 1.14 times more volatile than ATOSS SOFTWARE. It trades about -0.15 of its total potential returns per unit of risk. ATOSS SOFTWARE is currently generating about 0.09 per unit of volatility. If you would invest  11,400  in ATOSS SOFTWARE on December 29, 2024 and sell it today you would earn a total of  1,180  from holding ATOSS SOFTWARE or generate 10.35% return on investment over 90 days.

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

Cogent Communications Holdings  vs.  ATOSS SOFTWARE

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 uncertain performance in the last few months, the Stock's primary indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

ATOSS SOFTWARE

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ATOSS SOFTWARE are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, ATOSS SOFTWARE may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Cogent Communications and ATOSS SOFTWARE

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

The idea behind Cogent Communications Holdings and ATOSS SOFTWARE 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.