Correlation Between COL Financial and Converge Information

Can any of the company-specific risk be diversified away by investing in both COL Financial and Converge Information 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 COL Financial and Converge Information into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between COL Financial Group and Converge Information Communications, you can compare the effects of market volatilities on COL Financial and Converge Information 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 COL Financial with a short position of Converge Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of COL Financial and Converge Information.

Diversification Opportunities for COL Financial and Converge Information

-0.19

Correlation Coefficient

COL Financial  Converge Information

Good diversification

The 3 months correlation between COL and Converge is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding COL Financial Group and Converge Information Communica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Converge Information and COL Financial 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 COL Financial Group are associated (or correlated) with Converge Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Converge Information has no effect on the direction of COL Financial i.e., COL Financial and Converge Information go up and down completely randomly.

Pair Corralation between COL Financial and Converge Information

Assuming the 90 days trading horizon COL Financial Group is expected to generate 0.61 times more return on investment than Converge Information. However, COL Financial Group is 1.63 times less risky than Converge Information. It trades about -0.04 of its potential returns per unit of risk. Converge Information Communications is currently generating about -0.05 per unit of risk. If you would invest  150.00  in COL Financial Group on April 14, 2025 and sell it today you would lose (2.00) from holding COL Financial Group or give up 1.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

COL Financial Group  vs.  Converge Information Communica

COL Financial Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days COL Financial Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Converge Information

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Converge Information Communications are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Converge Information may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with COL Financial and Converge Information

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

The idea behind COL Financial Group and Converge Information Communications 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.

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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.