Correlation Between SBA Communications and COMBA TELECOM
Can any of the company-specific risk be diversified away by investing in both SBA Communications and COMBA TELECOM 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 SBA Communications and COMBA TELECOM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBA Communications Corp and COMBA TELECOM SYST, you can compare the effects of market volatilities on SBA Communications and COMBA TELECOM 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 SBA Communications with a short position of COMBA TELECOM. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBA Communications and COMBA TELECOM.
Diversification Opportunities for SBA Communications and COMBA TELECOM
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between SBA and COMBA is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding SBA Communications Corp and COMBA TELECOM SYST in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COMBA TELECOM SYST and SBA 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 SBA Communications Corp are associated (or correlated) with COMBA TELECOM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COMBA TELECOM SYST has no effect on the direction of SBA Communications i.e., SBA Communications and COMBA TELECOM go up and down completely randomly.
Pair Corralation between SBA Communications and COMBA TELECOM
Assuming the 90 days trading horizon SBA Communications Corp is expected to generate 1.02 times more return on investment than COMBA TELECOM. However, SBA Communications is 1.02 times more volatile than COMBA TELECOM SYST. It trades about 0.06 of its potential returns per unit of risk. COMBA TELECOM SYST is currently generating about -0.07 per unit of risk. If you would invest 20,323 in SBA Communications Corp on September 2, 2024 and sell it today you would earn a total of 1,257 from holding SBA Communications Corp or generate 6.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SBA Communications Corp vs. COMBA TELECOM SYST
Performance |
| Timeline |
| SBA Communications Corp |
| COMBA TELECOM SYST |
SBA Communications and COMBA TELECOM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBA Communications and COMBA TELECOM
The main advantage of trading using opposite SBA Communications and COMBA TELECOM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBA Communications position performs unexpectedly, COMBA TELECOM 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 COMBA TELECOM will offset losses from the drop in COMBA TELECOM's long position.| SBA Communications vs. Apple Inc | SBA Communications vs. Apple Inc | SBA Communications vs. Apple Inc | SBA Communications vs. Apple Inc |
| COMBA TELECOM vs. SIVERS SEMICONDUCTORS AB | COMBA TELECOM vs. Darden Restaurants | COMBA TELECOM vs. Reliance Steel Aluminum | COMBA TELECOM vs. Q2M Managementberatung AG |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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