Correlation Between Cogstate and Network Media
Can any of the company-specific risk be diversified away by investing in both Cogstate and Network Media 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 Cogstate and Network Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cogstate Limited and Network Media Group, you can compare the effects of market volatilities on Cogstate and Network Media 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 Cogstate with a short position of Network Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogstate and Network Media.
Diversification Opportunities for Cogstate and Network Media
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cogstate and Network is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Cogstate Limited and Network Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Network Media Group and Cogstate 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 Cogstate Limited are associated (or correlated) with Network Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Network Media Group has no effect on the direction of Cogstate i.e., Cogstate and Network Media go up and down completely randomly.
Pair Corralation between Cogstate and Network Media
Assuming the 90 days horizon Cogstate is expected to generate 3.17 times less return on investment than Network Media. But when comparing it to its historical volatility, Cogstate Limited is 1.68 times less risky than Network Media. It trades about 0.15 of its potential returns per unit of risk. Network Media Group is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 3.60 in Network Media Group on April 24, 2025 and sell it today you would earn a total of 6.40 from holding Network Media Group or generate 177.78% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 98.39% |
Values | Daily Returns |
Cogstate Limited vs. Network Media Group
Performance |
Timeline |
Cogstate Limited |
Network Media Group |
Cogstate and Network Media Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cogstate and Network Media
The main advantage of trading using opposite Cogstate and Network Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cogstate position performs unexpectedly, Network Media 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 Network Media will offset losses from the drop in Network Media's long position.Cogstate vs. Mednow Inc | Cogstate vs. EGF Theramed Health | Cogstate vs. Caduceus Software Systems | Cogstate vs. Sanara Medtech |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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