Correlation Between COMBA TELECOM and Cognex
Can any of the company-specific risk be diversified away by investing in both COMBA TELECOM and Cognex 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 Cognex 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 Cognex, you can compare the effects of market volatilities on COMBA TELECOM and Cognex 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 Cognex. Check out your portfolio center. Please also check ongoing floating volatility patterns of COMBA TELECOM and Cognex.
Diversification Opportunities for COMBA TELECOM and Cognex
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between COMBA and Cognex is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding COMBA TELECOM SYST and Cognex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cognex 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 Cognex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cognex has no effect on the direction of COMBA TELECOM i.e., COMBA TELECOM and Cognex go up and down completely randomly.
Pair Corralation between COMBA TELECOM and Cognex
Assuming the 90 days trading horizon COMBA TELECOM SYST is expected to under-perform the Cognex. But the stock apears to be less risky and, when comparing its historical volatility, COMBA TELECOM SYST is 1.49 times less risky than Cognex. The stock trades about -0.22 of its potential returns per unit of risk. The Cognex is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3,605 in Cognex on August 27, 2024 and sell it today you would earn a total of 129.00 from holding Cognex or generate 3.58% 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. Cognex
Performance |
| Timeline |
| COMBA TELECOM SYST |
| Cognex |
COMBA TELECOM and Cognex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COMBA TELECOM and Cognex
The main advantage of trading using opposite COMBA TELECOM and Cognex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COMBA TELECOM position performs unexpectedly, Cognex 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 Cognex will offset losses from the drop in Cognex's long position.| COMBA TELECOM vs. Apple Inc | COMBA TELECOM vs. Apple Inc | COMBA TELECOM vs. Apple Inc | COMBA TELECOM vs. Microsoft |
| Cognex vs. SERI INDUSTRIAL EO | Cognex vs. COMBA TELECOM SYST | Cognex vs. ADRIATIC METALS LS 013355 | Cognex vs. Singapore Telecommunications Limited |
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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