Correlation Between Cogstate and Mitesco

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

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

Diversification Opportunities for Cogstate and Mitesco

-0.42

Correlation Coefficient

Cogstate  Mitesco

Very good diversification

The 3 months correlation between Cogstate and Mitesco is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Cogstate Limited and Mitesco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitesco 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 Mitesco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitesco has no effect on the direction of Cogstate i.e., Cogstate and Mitesco go up and down completely randomly.

Pair Corralation between Cogstate and Mitesco

Assuming the 90 days horizon Cogstate is expected to generate 25.36 times less return on investment than Mitesco. But when comparing it to its historical volatility, Cogstate Limited is 18.25 times less risky than Mitesco. It trades about 0.11 of its potential returns per unit of risk. Mitesco is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  29.00  in Mitesco on September 14, 2024 and sell it today you would earn a total of  11.00  from holding Mitesco or generate 37.93% return on investment over 90 days.

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

Cogstate Limited  vs.  Mitesco

Cogstate Limited

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cogstate Limited are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Cogstate reported solid returns over the last few months and may actually be approaching a breakup point.

Mitesco

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mitesco are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly abnormal basic indicators, Mitesco demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cogstate and Mitesco

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

The idea behind Cogstate Limited and Mitesco 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.