Correlation Between Cogent Communications and Marie Brizard

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

Diversification Opportunities for Cogent Communications and Marie Brizard

-0.69

Correlation Coefficient

Cogent Communications  Marie Brizard

Excellent diversification

The 3 months correlation between Cogent and Marie is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Cogent Communications Holdings and Marie Brizard Wine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marie Brizard Wine 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 Marie Brizard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marie Brizard Wine has no effect on the direction of Cogent Communications i.e., Cogent Communications and Marie Brizard go up and down completely randomly.

Pair Corralation between Cogent Communications and Marie Brizard

Assuming the 90 days trading horizon Cogent Communications Holdings is expected to under-perform the Marie Brizard. In addition to that, Cogent Communications is 1.17 times more volatile than Marie Brizard Wine. It trades about -0.17 of its total potential returns per unit of risk. Marie Brizard Wine is currently generating about 0.14 per unit of volatility. If you would invest  305.00  in Marie Brizard Wine on March 2, 2024 and sell it today you would earn a total of  12.00  from holding Marie Brizard Wine or generate 3.93% return on investment over 90 days.

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

Cogent Communications Holdings  vs.  Marie Brizard Wine

Cogent Communications

Risk-Adjusted Performance

0 of 100

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 fragile performance in the last few months, the Stock's primary indicators remain nearly stable which may send shares a bit higher in July 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Marie Brizard Wine

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Marie Brizard Wine are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Marie Brizard may actually be approaching a critical reversion point that can send shares even higher in July 2024.

Pair Trading with Cogent Communications and Marie Brizard

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

The idea behind Cogent Communications Holdings and Marie Brizard Wine 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.