Correlation Between Comtech Telecommunicatio and Frequency Electronics
Can any of the company-specific risk be diversified away by investing in both Comtech Telecommunicatio and Frequency Electronics 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 Frequency Electronics 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 Frequency Electronics, you can compare the effects of market volatilities on Comtech Telecommunicatio and Frequency Electronics 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 Frequency Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comtech Telecommunicatio and Frequency Electronics.
Diversification Opportunities for Comtech Telecommunicatio and Frequency Electronics
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Comtech and Frequency is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Comtech Telecommunications Cor and Frequency Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frequency Electronics 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 Frequency Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frequency Electronics has no effect on the direction of Comtech Telecommunicatio i.e., Comtech Telecommunicatio and Frequency Electronics go up and down completely randomly.
Pair Corralation between Comtech Telecommunicatio and Frequency Electronics
Given the investment horizon of 90 days Comtech Telecommunications Corp is expected to under-perform the Frequency Electronics. In addition to that, Comtech Telecommunicatio is 7.48 times more volatile than Frequency Electronics. It trades about -0.06 of its total potential returns per unit of risk. Frequency Electronics is currently generating about 0.27 per unit of volatility. If you would invest 1,258 in Frequency Electronics on August 27, 2024 and sell it today you would earn a total of 71.00 from holding Frequency Electronics or generate 5.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Comtech Telecommunications Cor vs. Frequency Electronics
Performance |
| Timeline |
| Comtech Telecommunicatio |
| Frequency Electronics |
Comtech Telecommunicatio and Frequency Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comtech Telecommunicatio and Frequency Electronics
The main advantage of trading using opposite Comtech Telecommunicatio and Frequency Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comtech Telecommunicatio position performs unexpectedly, Frequency Electronics 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 Frequency Electronics will offset losses from the drop in Frequency Electronics' long position.| Comtech Telecommunicatio vs. Ichor Holdings | Comtech Telecommunicatio vs. Fabrinet | Comtech Telecommunicatio vs. Hello Group | Comtech Telecommunicatio vs. Ultra Clean Holdings |
| Frequency Electronics vs. BK Technologies | Frequency Electronics vs. Actelis Networks | Frequency Electronics vs. Lantronix | Frequency Electronics vs. KVH Industries |
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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