Correlation Between Cogent Communications and MTI WIRELESS
Can any of the company-specific risk be diversified away by investing in both Cogent Communications and MTI WIRELESS 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 MTI WIRELESS 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 MTI WIRELESS EDGE, you can compare the effects of market volatilities on Cogent Communications and MTI WIRELESS 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 MTI WIRELESS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogent Communications and MTI WIRELESS.
Diversification Opportunities for Cogent Communications and MTI WIRELESS
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cogent and MTI is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Cogent Communications Holdings and MTI WIRELESS EDGE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MTI WIRELESS EDGE 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 MTI WIRELESS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MTI WIRELESS EDGE has no effect on the direction of Cogent Communications i.e., Cogent Communications and MTI WIRELESS go up and down completely randomly.
Pair Corralation between Cogent Communications and MTI WIRELESS
Assuming the 90 days trading horizon Cogent Communications Holdings is expected to under-perform the MTI WIRELESS. But the stock apears to be less risky and, when comparing its historical volatility, Cogent Communications Holdings is 3.45 times less risky than MTI WIRELESS. The stock trades about -0.15 of its potential returns per unit of risk. The MTI WIRELESS EDGE is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 42.00 in MTI WIRELESS EDGE on December 29, 2024 and sell it today you would earn a total of 14.00 from holding MTI WIRELESS EDGE or generate 33.33% 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. MTI WIRELESS EDGE
Performance |
Timeline |
Cogent Communications |
MTI WIRELESS EDGE |
Cogent Communications and MTI WIRELESS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cogent Communications and MTI WIRELESS
The main advantage of trading using opposite Cogent Communications and MTI WIRELESS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cogent Communications position performs unexpectedly, MTI WIRELESS 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 MTI WIRELESS will offset losses from the drop in MTI WIRELESS's long position.Cogent Communications vs. TAL Education Group | Cogent Communications vs. Yuexiu Transport Infrastructure | Cogent Communications vs. G8 EDUCATION | Cogent Communications vs. ARDAGH METAL PACDL 0001 |
MTI WIRELESS vs. Tradegate AG Wertpapierhandelsbank | MTI WIRELESS vs. JAPAN TOBACCO UNSPADR12 | MTI WIRELESS vs. MARKET VECTR RETAIL | MTI WIRELESS vs. Japan Tobacco |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
Content Syndication Quickly integrate customizable finance content to your own investment portal | |
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |