Correlation Between BT Group and Cogent Communications
Can any of the company-specific risk be diversified away by investing in both BT Group 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 BT Group and Cogent Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BT Group Plc and Cogent Communications Group, you can compare the effects of market volatilities on BT Group 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 BT Group with a short position of Cogent Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of BT Group and Cogent Communications.
Diversification Opportunities for BT Group and Cogent Communications
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BT Group and Cogent is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BT Group Plc and Cogent Communications Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogent Communications and BT Group 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 BT Group Plc 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 BT Group i.e., BT Group and Cogent Communications go up and down completely randomly.
Pair Corralation between BT Group and Cogent Communications
If you would invest 6,284 in Cogent Communications Group on January 20, 2024 and sell it today you would earn a total of 29.00 from holding Cogent Communications Group or generate 0.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
BT Group Plc vs. Cogent Communications Group
Performance |
| Timeline |
| BT Group Plc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Cogent Communications |
BT Group and Cogent Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BT Group and Cogent Communications
The main advantage of trading using opposite BT Group and Cogent Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BT Group 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.| BT Group vs. Aegon NV ADR | BT Group vs. Tandem Diabetes Care | BT Group vs. Alternative Investment | BT Group vs. Comstock Holding Companies |
| Cogent Communications vs. Grab Holdings | Cogent Communications vs. Cadence Design Systems | Cogent Communications vs. Aquagold International | Cogent Communications vs. Thrivent High Yield |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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