Correlation Between COMBA TELECOM and Zhongsheng Group
Can any of the company-specific risk be diversified away by investing in both COMBA TELECOM and Zhongsheng Group 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 COMBA TELECOM and Zhongsheng Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COMBA TELECOM SYST and Zhongsheng Group Holdings, you can compare the effects of market volatilities on COMBA TELECOM and Zhongsheng Group 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 COMBA TELECOM with a short position of Zhongsheng Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of COMBA TELECOM and Zhongsheng Group.
Diversification Opportunities for COMBA TELECOM and Zhongsheng Group
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between COMBA and Zhongsheng is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding COMBA TELECOM SYST and Zhongsheng Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongsheng Group Holdings and COMBA TELECOM 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 COMBA TELECOM SYST are associated (or correlated) with Zhongsheng Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhongsheng Group Holdings has no effect on the direction of COMBA TELECOM i.e., COMBA TELECOM and Zhongsheng Group go up and down completely randomly.
Pair Corralation between COMBA TELECOM and Zhongsheng Group
Assuming the 90 days trading horizon COMBA TELECOM SYST is expected to under-perform the Zhongsheng Group. But the stock apears to be less risky and, when comparing its historical volatility, COMBA TELECOM SYST is 3.07 times less risky than Zhongsheng Group. The stock trades about -0.01 of its potential returns per unit of risk. The Zhongsheng Group Holdings is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 152.00 in Zhongsheng Group Holdings on September 3, 2024 and sell it today you would earn a total of 31.00 from holding Zhongsheng Group Holdings or generate 20.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
COMBA TELECOM SYST vs. Zhongsheng Group Holdings
Performance |
| Timeline |
| COMBA TELECOM SYST |
| Zhongsheng Group Holdings |
COMBA TELECOM and Zhongsheng Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COMBA TELECOM and Zhongsheng Group
The main advantage of trading using opposite COMBA TELECOM and Zhongsheng Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COMBA TELECOM position performs unexpectedly, Zhongsheng Group 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 Zhongsheng Group will offset losses from the drop in Zhongsheng Group's long position.| COMBA TELECOM vs. TOTAL GABON | COMBA TELECOM vs. Walgreens Boots Alliance | COMBA TELECOM vs. Peak Resources Limited |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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