Correlation Between Transcontinental and Cogeco

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

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

Diversification Opportunities for Transcontinental and Cogeco

0.72

Correlation Coefficient

Transcontinental  Cogeco

Poor diversification

The 3 months correlation between Transcontinental and Cogeco is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Transcontinental and Cogeco Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogeco Inc and Transcontinental 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 Transcontinental are associated (or correlated) with Cogeco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cogeco Inc has no effect on the direction of Transcontinental i.e., Transcontinental and Cogeco go up and down completely randomly.

Pair Corralation between Transcontinental and Cogeco

Assuming the 90 days trading horizon Transcontinental is expected to generate 0.76 times more return on investment than Cogeco. However, Transcontinental is 1.32 times less risky than Cogeco. It trades about 0.19 of its potential returns per unit of risk. Cogeco Inc is currently generating about 0.02 per unit of risk. If you would invest  1,740  in Transcontinental on April 20, 2025 and sell it today you would earn a total of  267.00  from holding Transcontinental or generate 15.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Transcontinental  vs.  Cogeco Inc

Transcontinental

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Transcontinental are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Transcontinental unveiled solid returns over the last few months and may actually be approaching a breakup point.

Cogeco Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cogeco Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Cogeco is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Transcontinental and Cogeco

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

The idea behind Transcontinental and Cogeco Inc 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.