Correlation Between Comtech Telecommunicatio and Imax Corp
Can any of the company-specific risk be diversified away by investing in both Comtech Telecommunicatio and Imax Corp 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 Imax Corp 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 Imax Corp, you can compare the effects of market volatilities on Comtech Telecommunicatio and Imax Corp 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 Imax Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comtech Telecommunicatio and Imax Corp.
Diversification Opportunities for Comtech Telecommunicatio and Imax Corp
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Comtech and Imax is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Comtech Telecommunications Cor and Imax Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imax 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 Imax Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imax Corp has no effect on the direction of Comtech Telecommunicatio i.e., Comtech Telecommunicatio and Imax Corp go up and down completely randomly.
Pair Corralation between Comtech Telecommunicatio and Imax Corp
Given the investment horizon of 90 days Comtech Telecommunications Corp is expected to under-perform the Imax Corp. In addition to that, Comtech Telecommunicatio is 2.65 times more volatile than Imax Corp. It trades about -0.07 of its total potential returns per unit of risk. Imax Corp is currently generating about 0.22 per unit of volatility. If you would invest 2,051 in Imax Corp on August 30, 2024 and sell it today you would earn a total of 552.00 from holding Imax Corp or generate 26.91% 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. Imax Corp
Performance |
| Timeline |
| Comtech Telecommunicatio |
| Imax Corp |
Comtech Telecommunicatio and Imax Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comtech Telecommunicatio and Imax Corp
The main advantage of trading using opposite Comtech Telecommunicatio and Imax Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comtech Telecommunicatio position performs unexpectedly, Imax Corp 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 Imax Corp will offset losses from the drop in Imax Corp's long position.| Comtech Telecommunicatio vs. Knowles Cor | Comtech Telecommunicatio vs. AudioCodes | Comtech Telecommunicatio vs. Ituran Location and | Comtech Telecommunicatio vs. Aviat Networks |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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