Correlation Between Collins Foods and Comba Telecom
Can any of the company-specific risk be diversified away by investing in both Collins Foods 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 Collins Foods and Comba Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Collins Foods Limited and Comba Telecom Systems, you can compare the effects of market volatilities on Collins Foods 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 Collins Foods with a short position of Comba Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Collins Foods and Comba Telecom.
Diversification Opportunities for Collins Foods and Comba Telecom
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Collins and Comba is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Collins Foods Limited and Comba Telecom Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comba Telecom Systems and Collins Foods 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 Collins Foods Limited 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 Systems has no effect on the direction of Collins Foods i.e., Collins Foods and Comba Telecom go up and down completely randomly.
Pair Corralation between Collins Foods and Comba Telecom
Assuming the 90 days horizon Collins Foods is expected to generate 4.73 times less return on investment than Comba Telecom. But when comparing it to its historical volatility, Collins Foods Limited is 2.43 times less risky than Comba Telecom. It trades about 0.01 of its potential returns per unit of risk. Comba Telecom Systems is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 14.00 in Comba Telecom Systems on October 1, 2024 and sell it today you would earn a total of 0.00 from holding Comba Telecom Systems or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Collins Foods Limited vs. Comba Telecom Systems
Performance |
| Timeline |
| Collins Foods Limited |
| Comba Telecom Systems |
Collins Foods and Comba Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Collins Foods and Comba Telecom
The main advantage of trading using opposite Collins Foods and Comba Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Collins Foods 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.| Collins Foods vs. INFORMATION SVC GRP | Collins Foods vs. Microchip Technology Incorporated | Collins Foods vs. Check Point Software | Collins Foods vs. Sunny Optical Technology |
| Comba Telecom vs. QINGCI GAMES INC | Comba Telecom vs. GigaMedia | Comba Telecom vs. Games Workshop Group | Comba Telecom vs. Xinhua Winshare Publishing |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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