Correlation Between Clearfield and Comtech Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both Clearfield 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 Clearfield and Comtech Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clearfield and Comtech Telecommunications Corp, you can compare the effects of market volatilities on Clearfield 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 Clearfield with a short position of Comtech Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearfield and Comtech Telecommunicatio.
Diversification Opportunities for Clearfield and Comtech Telecommunicatio
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Clearfield and Comtech is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Clearfield and Comtech Telecommunications Cor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comtech Telecommunicatio and Clearfield 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 Clearfield 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 Clearfield i.e., Clearfield and Comtech Telecommunicatio go up and down completely randomly.
Pair Corralation between Clearfield and Comtech Telecommunicatio
Given the investment horizon of 90 days Clearfield is expected to under-perform the Comtech Telecommunicatio. But the stock apears to be less risky and, when comparing its historical volatility, Clearfield is 2.14 times less risky than Comtech Telecommunicatio. The stock trades about -0.07 of its potential returns per unit of risk. The Comtech Telecommunications Corp is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,258 in Comtech Telecommunications Corp on August 24, 2024 and sell it today you would lose (942.00) from holding Comtech Telecommunications Corp or give up 74.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clearfield vs. Comtech Telecommunications Cor
Performance |
| Timeline |
| Clearfield |
| Comtech Telecommunicatio |
Clearfield and Comtech Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearfield and Comtech Telecommunicatio
The main advantage of trading using opposite Clearfield and Comtech Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearfield 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.| Clearfield vs. Comtech Telecommunications Corp | Clearfield vs. Knowles Cor | Clearfield vs. Extreme Networks | Clearfield vs. KVH Industries |
| Comtech Telecommunicatio vs. Frequency Electronics | Comtech Telecommunicatio vs. Actelis Networks | Comtech Telecommunicatio vs. Optical Cable | Comtech Telecommunicatio vs. Lantronix |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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