Correlation Between Cogent Communications and GOLD ROAD
Can any of the company-specific risk be diversified away by investing in both Cogent Communications and GOLD ROAD 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 GOLD ROAD 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 GOLD ROAD RES, you can compare the effects of market volatilities on Cogent Communications and GOLD ROAD 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 GOLD ROAD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogent Communications and GOLD ROAD.
Diversification Opportunities for Cogent Communications and GOLD ROAD
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cogent and GOLD is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Cogent Communications Holdings and GOLD ROAD RES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GOLD ROAD RES 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 GOLD ROAD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GOLD ROAD RES has no effect on the direction of Cogent Communications i.e., Cogent Communications and GOLD ROAD go up and down completely randomly.
Pair Corralation between Cogent Communications and GOLD ROAD
Assuming the 90 days trading horizon Cogent Communications Holdings is expected to under-perform the GOLD ROAD. In addition to that, Cogent Communications is 1.34 times more volatile than GOLD ROAD RES. It trades about -0.07 of its total potential returns per unit of risk. GOLD ROAD RES is currently generating about 0.77 per unit of volatility. If you would invest 122.00 in GOLD ROAD RES on October 20, 2024 and sell it today you would earn a total of 20.00 from holding GOLD ROAD RES or generate 16.39% 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. GOLD ROAD RES
Performance |
Timeline |
Cogent Communications |
GOLD ROAD RES |
Cogent Communications and GOLD ROAD Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cogent Communications and GOLD ROAD
The main advantage of trading using opposite Cogent Communications and GOLD ROAD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cogent Communications position performs unexpectedly, GOLD ROAD 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 GOLD ROAD will offset losses from the drop in GOLD ROAD's long position.Cogent Communications vs. GEELY AUTOMOBILE | Cogent Communications vs. National Beverage Corp | Cogent Communications vs. T Mobile | Cogent Communications vs. Suntory Beverage Food |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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