Correlation Between China TowerLimited and COMSovereign Holding
Can any of the company-specific risk be diversified away by investing in both China TowerLimited and COMSovereign Holding 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 China TowerLimited and COMSovereign Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Tower and COMSovereign Holding Corp, you can compare the effects of market volatilities on China TowerLimited and COMSovereign Holding 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 China TowerLimited with a short position of COMSovereign Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of China TowerLimited and COMSovereign Holding.
Diversification Opportunities for China TowerLimited and COMSovereign Holding
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and COMSovereign is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding China Tower and COMSovereign Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COMSovereign Holding Corp and China TowerLimited 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 China Tower are associated (or correlated) with COMSovereign Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COMSovereign Holding Corp has no effect on the direction of China TowerLimited i.e., China TowerLimited and COMSovereign Holding go up and down completely randomly.
Pair Corralation between China TowerLimited and COMSovereign Holding
Assuming the 90 days horizon China Tower is expected to generate 5.73 times more return on investment than COMSovereign Holding. However, China TowerLimited is 5.73 times more volatile than COMSovereign Holding Corp. It trades about 0.18 of its potential returns per unit of risk. COMSovereign Holding Corp is currently generating about -0.1 per unit of risk. If you would invest 3.37 in China Tower on August 30, 2024 and sell it today you would earn a total of 9.63 from holding China Tower or generate 285.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 40.05% |
| Values | Daily Returns |
China Tower vs. COMSovereign Holding Corp
Performance |
| Timeline |
| China TowerLimited |
| COMSovereign Holding Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
China TowerLimited and COMSovereign Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China TowerLimited and COMSovereign Holding
The main advantage of trading using opposite China TowerLimited and COMSovereign Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China TowerLimited position performs unexpectedly, COMSovereign Holding 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 COMSovereign Holding will offset losses from the drop in COMSovereign Holding's long position.| China TowerLimited vs. Singapore Telecommunications Limited | China TowerLimited vs. Vodafone Group PLC | China TowerLimited vs. PT Indosat Tbk | China TowerLimited vs. KDDI Corp |
| COMSovereign Holding vs. KORE Group Holdings | COMSovereign Holding vs. Liberty Broadband Srs | COMSovereign Holding vs. Liberty Broadband Srs | COMSovereign Holding vs. Consolidated Communications |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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