Correlation Between Comtech Telecommunicatio and Dear Cashmere
Can any of the company-specific risk be diversified away by investing in both Comtech Telecommunicatio and Dear Cashmere 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 Comtech Telecommunicatio and Dear Cashmere into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Comtech Telecommunications Corp and Dear Cashmere Holding, you can compare the effects of market volatilities on Comtech Telecommunicatio and Dear Cashmere 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 Comtech Telecommunicatio with a short position of Dear Cashmere. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comtech Telecommunicatio and Dear Cashmere.
Diversification Opportunities for Comtech Telecommunicatio and Dear Cashmere
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Comtech and Dear is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Comtech Telecommunications Cor and Dear Cashmere Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dear Cashmere Holding and Comtech Telecommunicatio 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 Comtech Telecommunications Corp are associated (or correlated) with Dear Cashmere. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dear Cashmere Holding has no effect on the direction of Comtech Telecommunicatio i.e., Comtech Telecommunicatio and Dear Cashmere go up and down completely randomly.
Pair Corralation between Comtech Telecommunicatio and Dear Cashmere
Given the investment horizon of 90 days Comtech Telecommunications Corp is expected to under-perform the Dear Cashmere. But the stock apears to be less risky and, when comparing its historical volatility, Comtech Telecommunications Corp is 1.45 times less risky than Dear Cashmere. The stock trades about -0.06 of its potential returns per unit of risk. The Dear Cashmere Holding is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 15.00 in Dear Cashmere Holding on August 27, 2024 and sell it today you would earn a total of 3.00 from holding Dear Cashmere Holding or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Comtech Telecommunications Cor vs. Dear Cashmere Holding
Performance |
| Timeline |
| Comtech Telecommunicatio |
| Dear Cashmere Holding |
Comtech Telecommunicatio and Dear Cashmere Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comtech Telecommunicatio and Dear Cashmere
The main advantage of trading using opposite Comtech Telecommunicatio and Dear Cashmere positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comtech Telecommunicatio position performs unexpectedly, Dear Cashmere 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 Dear Cashmere will offset losses from the drop in Dear Cashmere's long position.| Comtech Telecommunicatio vs. Ichor Holdings | Comtech Telecommunicatio vs. Fabrinet | Comtech Telecommunicatio vs. Hello Group | Comtech Telecommunicatio vs. Ultra Clean Holdings |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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