Correlation Between Cogent Communications and INTERNET INJPADR

Can any of the company-specific risk be diversified away by investing in both Cogent Communications and INTERNET INJPADR 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 INTERNET INJPADR 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 INTERNET INJPADR 1, you can compare the effects of market volatilities on Cogent Communications and INTERNET INJPADR 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 INTERNET INJPADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogent Communications and INTERNET INJPADR.

Diversification Opportunities for Cogent Communications and INTERNET INJPADR

-0.07

Correlation Coefficient

Cogent Communications  INTERNET INJPADR

Good diversification

The 3 months correlation between Cogent and INTERNET is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Cogent Communications Holdings and INTERNET INJPADR 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTERNET INJPADR 1 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 INTERNET INJPADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTERNET INJPADR 1 has no effect on the direction of Cogent Communications i.e., Cogent Communications and INTERNET INJPADR go up and down completely randomly.

Pair Corralation between Cogent Communications and INTERNET INJPADR

Assuming the 90 days trading horizon Cogent Communications Holdings is expected to generate 0.92 times more return on investment than INTERNET INJPADR. However, Cogent Communications Holdings is 1.09 times less risky than INTERNET INJPADR. It trades about -0.08 of its potential returns per unit of risk. INTERNET INJPADR 1 is currently generating about -0.22 per unit of risk. If you would invest  7,200  in Cogent Communications Holdings on October 11, 2024 and sell it today you would lose (200.00) from holding Cogent Communications Holdings or give up 2.78% of portfolio value over 90 days.

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

Cogent Communications Holdings  vs.  INTERNET INJPADR 1

Cogent Communications

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cogent Communications Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable primary indicators, Cogent Communications is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

INTERNET INJPADR 1

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INTERNET INJPADR 1 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, INTERNET INJPADR is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Cogent Communications and INTERNET INJPADR

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

The idea behind Cogent Communications Holdings and INTERNET INJPADR 1 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.