Correlation Between Cogeco Communications and Opendoor Technologies

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

By analyzing existing cross correlation between Cogeco Communications and Opendoor Technologies, you can compare the effects of market volatilities on Cogeco Communications and Opendoor Technologies 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 Opendoor Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogeco Communications and Opendoor Technologies.

Diversification Opportunities for Cogeco Communications and Opendoor Technologies

-0.49

Correlation Coefficient

Cogeco Communications  Opendoor Technologies

Very good diversification

The 3 months correlation between Cogeco and Opendoor is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Cogeco Communications and Opendoor Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Opendoor Technologies 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 Opendoor Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Opendoor Technologies has no effect on the direction of Cogeco Communications i.e., Cogeco Communications and Opendoor Technologies go up and down completely randomly.

Pair Corralation between Cogeco Communications and Opendoor Technologies

Assuming the 90 days trading horizon Cogeco Communications is expected to generate 0.36 times more return on investment than Opendoor Technologies. However, Cogeco Communications is 2.81 times less risky than Opendoor Technologies. It trades about 0.08 of its potential returns per unit of risk. Opendoor Technologies is currently generating about -0.12 per unit of risk. If you would invest  6,096  in Cogeco Communications on January 19, 2025 and sell it today you would earn a total of  473.00  from holding Cogeco Communications or generate 7.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Cogeco Communications  vs.  Opendoor Technologies

Cogeco Communications

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cogeco Communications are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Cogeco Communications may actually be approaching a critical reversion point that can send shares even higher in May 2025.

Opendoor Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Opendoor Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in May 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Cogeco Communications and Opendoor Technologies

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

The idea behind Cogeco Communications and Opendoor Technologies 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.