Correlation Between Applied Opt and Comtech Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both Applied Opt and Comtech Telecommunicatio 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 Applied Opt and Comtech Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Opt and Comtech Telecommunications Corp, you can compare the effects of market volatilities on Applied Opt and Comtech Telecommunicatio 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 Applied Opt with a short position of Comtech Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Opt and Comtech Telecommunicatio.
Diversification Opportunities for Applied Opt and Comtech Telecommunicatio
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Applied and Comtech is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Applied Opt and Comtech Telecommunications Cor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comtech Telecommunicatio and Applied Opt 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 Applied Opt are associated (or correlated) with Comtech Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comtech Telecommunicatio has no effect on the direction of Applied Opt i.e., Applied Opt and Comtech Telecommunicatio go up and down completely randomly.
Pair Corralation between Applied Opt and Comtech Telecommunicatio
Given the investment horizon of 90 days Applied Opt is expected to generate 1.77 times more return on investment than Comtech Telecommunicatio. However, Applied Opt is 1.77 times more volatile than Comtech Telecommunications Corp. It trades about 0.31 of its potential returns per unit of risk. Comtech Telecommunications Corp is currently generating about -0.07 per unit of risk. If you would invest 1,701 in Applied Opt on August 24, 2024 and sell it today you would earn a total of 1,849 from holding Applied Opt or generate 108.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Applied Opt vs. Comtech Telecommunications Cor
Performance |
| Timeline |
| Applied Opt |
| Comtech Telecommunicatio |
Applied Opt and Comtech Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Opt and Comtech Telecommunicatio
The main advantage of trading using opposite Applied Opt and Comtech Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Opt position performs unexpectedly, Comtech Telecommunicatio 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 Comtech Telecommunicatio will offset losses from the drop in Comtech Telecommunicatio's long position.| Applied Opt vs. Lumentum Holdings | Applied Opt vs. Ichor Holdings | Applied Opt vs. Fabrinet | Applied Opt vs. Hello Group |
| Comtech Telecommunicatio vs. KVH Industries | Comtech Telecommunicatio vs. Aviat Networks | Comtech Telecommunicatio vs. Harmonic | Comtech Telecommunicatio vs. Telesat Corp |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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