Correlation Between Cogent Communications and BAKED GAMES

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

Diversification Opportunities for Cogent Communications and BAKED GAMES

0.32

Correlation Coefficient

Cogent Communications  BAKED GAMES

Weak diversification

The 3 months correlation between Cogent and BAKED is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Cogent Communications Holdings and BAKED GAMES SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BAKED GAMES SA 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 BAKED GAMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BAKED GAMES SA has no effect on the direction of Cogent Communications i.e., Cogent Communications and BAKED GAMES go up and down completely randomly.

Pair Corralation between Cogent Communications and BAKED GAMES

Assuming the 90 days trading horizon Cogent Communications Holdings is expected to under-perform the BAKED GAMES. In addition to that, Cogent Communications is 1.05 times more volatile than BAKED GAMES SA. It trades about -0.05 of its total potential returns per unit of risk. BAKED GAMES SA is currently generating about -0.05 per unit of volatility. If you would invest  64.00  in BAKED GAMES SA on April 24, 2025 and sell it today you would lose (6.00) from holding BAKED GAMES SA or give up 9.38% of portfolio value over 90 days.

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

Cogent Communications Holdings  vs.  BAKED GAMES SA

Cogent Communications

Risk-Adjusted Performance

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 latest fragile performance, the Stock's primary indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

BAKED GAMES SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days BAKED GAMES SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Cogent Communications and BAKED GAMES

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

The idea behind Cogent Communications Holdings and BAKED GAMES SA 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.