Correlation Between KBC Ancora and Cogent Communications

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

By analyzing existing cross correlation between KBC Ancora SCA and Cogent Communications Holdings, you can compare the effects of market volatilities on KBC Ancora 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 KBC Ancora with a short position of Cogent Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of KBC Ancora and Cogent Communications.

Diversification Opportunities for KBC Ancora and Cogent Communications

-0.52

Correlation Coefficient

KBC Ancora  Cogent Communications

Excellent diversification

The 3 months correlation between KBC and Cogent is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding KBC Ancora SCA and Cogent Communications Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogent Communications and KBC Ancora 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 KBC Ancora SCA 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 KBC Ancora i.e., KBC Ancora and Cogent Communications go up and down completely randomly.

Pair Corralation between KBC Ancora and Cogent Communications

Assuming the 90 days horizon KBC Ancora SCA is expected to generate 0.5 times more return on investment than Cogent Communications. However, KBC Ancora SCA is 2.01 times less risky than Cogent Communications. It trades about 0.19 of its potential returns per unit of risk. Cogent Communications Holdings is currently generating about 0.04 per unit of risk. If you would invest  5,176  in KBC Ancora SCA on April 22, 2025 and sell it today you would earn a total of  824.00  from holding KBC Ancora SCA or generate 15.92% return on investment over 90 days.

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

KBC Ancora SCA  vs.  Cogent Communications Holdings

KBC Ancora SCA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in KBC Ancora SCA are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, KBC Ancora reported solid returns over the last few months and may actually be approaching a breakup point.

Cogent Communications

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cogent Communications Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable primary indicators, Cogent Communications is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with KBC Ancora and Cogent Communications

The main advantage of trading using opposite KBC Ancora and Cogent Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KBC Ancora 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.

The idea behind KBC Ancora SCA and Cogent Communications Holdings 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.