Correlation Between Cogeco Communications and Global Crossing

Can any of the company-specific risk be diversified away by investing in both Cogeco Communications and Global Crossing 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 Cogeco Communications and Global Crossing into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cogeco Communications and Global Crossing Airlines, you can compare the effects of market volatilities on Cogeco Communications and Global Crossing 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 Cogeco Communications with a short position of Global Crossing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogeco Communications and Global Crossing.

Diversification Opportunities for Cogeco Communications and Global Crossing

0.01

Correlation Coefficient

Cogeco Communications  Global Crossing

Significant diversification

The 3 months correlation between Cogeco and Global is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Cogeco Communications and Global Crossing Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Crossing Airlines and Cogeco 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 Cogeco Communications are associated (or correlated) with Global Crossing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Crossing Airlines has no effect on the direction of Cogeco Communications i.e., Cogeco Communications and Global Crossing go up and down completely randomly.

Pair Corralation between Cogeco Communications and Global Crossing

Assuming the 90 days trading horizon Cogeco Communications is expected to generate 0.46 times more return on investment than Global Crossing. However, Cogeco Communications is 2.17 times less risky than Global Crossing. It trades about 0.04 of its potential returns per unit of risk. Global Crossing Airlines is currently generating about 0.0 per unit of risk. If you would invest  6,463  in Cogeco Communications on April 25, 2025 and sell it today you would earn a total of  215.00  from holding Cogeco Communications or generate 3.33% return on investment over 90 days.

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

Cogeco Communications  vs.  Global Crossing Airlines

Cogeco Communications

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cogeco Communications are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Cogeco Communications is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Global Crossing Airlines

Risk-Adjusted Performance

Weak

Over the last 90 days Global Crossing Airlines has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Global Crossing is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Cogeco Communications and Global Crossing

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

The idea behind Cogeco Communications and Global Crossing Airlines 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.