Correlation Between Rogers Communications and Dividend Growth

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

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

Diversification Opportunities for Rogers Communications and Dividend Growth

-0.34

Correlation Coefficient

Rogers Communications  Dividend Growth

Very good diversification

The 3 months correlation between Rogers and Dividend is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Rogers Communications and Dividend Growth Split in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dividend Growth Split and Rogers 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 Rogers Communications are associated (or correlated) with Dividend Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dividend Growth Split has no effect on the direction of Rogers Communications i.e., Rogers Communications and Dividend Growth go up and down completely randomly.

Pair Corralation between Rogers Communications and Dividend Growth

Assuming the 90 days trading horizon Rogers Communications is expected to under-perform the Dividend Growth. In addition to that, Rogers Communications is 1.46 times more volatile than Dividend Growth Split. It trades about -0.03 of its total potential returns per unit of risk. Dividend Growth Split is currently generating about 0.28 per unit of volatility. If you would invest  622.00  in Dividend Growth Split on August 30, 2024 and sell it today you would earn a total of  102.00  from holding Dividend Growth Split or generate 16.4% return on investment over 90 days.

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

Rogers Communications  vs.  Dividend Growth Split

Rogers Communications

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rogers Communications has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Rogers Communications is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Dividend Growth Split

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Dividend Growth Split are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Dividend Growth displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Rogers Communications and Dividend Growth

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

The idea behind Rogers Communications and Dividend Growth Split 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.