Correlation Between Comtech Telecommunicatio and Franklin Wireless
Can any of the company-specific risk be diversified away by investing in both Comtech Telecommunicatio and Franklin Wireless 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 Franklin Wireless 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 Franklin Wireless Corp, you can compare the effects of market volatilities on Comtech Telecommunicatio and Franklin Wireless 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 Franklin Wireless. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comtech Telecommunicatio and Franklin Wireless.
Diversification Opportunities for Comtech Telecommunicatio and Franklin Wireless
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Comtech and Franklin is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Comtech Telecommunications Cor and Franklin Wireless Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Wireless Corp 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 Franklin Wireless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Wireless Corp has no effect on the direction of Comtech Telecommunicatio i.e., Comtech Telecommunicatio and Franklin Wireless go up and down completely randomly.
Pair Corralation between Comtech Telecommunicatio and Franklin Wireless
Given the investment horizon of 90 days Comtech Telecommunications Corp is expected to under-perform the Franklin Wireless. In addition to that, Comtech Telecommunicatio is 3.79 times more volatile than Franklin Wireless Corp. It trades about -0.07 of its total potential returns per unit of risk. Franklin Wireless Corp is currently generating about 0.05 per unit of volatility. If you would invest 423.00 in Franklin Wireless Corp on August 24, 2024 and sell it today you would earn a total of 7.00 from holding Franklin Wireless Corp or generate 1.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Comtech Telecommunications Cor vs. Franklin Wireless Corp
Performance |
| Timeline |
| Comtech Telecommunicatio |
| Franklin Wireless Corp |
Comtech Telecommunicatio and Franklin Wireless Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comtech Telecommunicatio and Franklin Wireless
The main advantage of trading using opposite Comtech Telecommunicatio and Franklin Wireless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comtech Telecommunicatio position performs unexpectedly, Franklin Wireless 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 Franklin Wireless will offset losses from the drop in Franklin Wireless' long position.| Comtech Telecommunicatio vs. KVH Industries | Comtech Telecommunicatio vs. Aviat Networks | Comtech Telecommunicatio vs. Harmonic | Comtech Telecommunicatio vs. Telesat Corp |
| Franklin Wireless vs. Wialan Technologies | Franklin Wireless vs. TPT Global Tech | Franklin Wireless vs. Moving iMage Technologies | Franklin Wireless vs. Comtech Telecommunications 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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