Correlation Between COMBA TELECOM and Colgate Palmolive

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both COMBA TELECOM and Colgate Palmolive 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 Colgate Palmolive 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 Colgate Palmolive, you can compare the effects of market volatilities on COMBA TELECOM and Colgate Palmolive 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 Colgate Palmolive. Check out your portfolio center. Please also check ongoing floating volatility patterns of COMBA TELECOM and Colgate Palmolive.

Diversification Opportunities for COMBA TELECOM and Colgate Palmolive

COMBAColgateDiversified AwayCOMBAColgateDiversified Away100%
-0.22
  Correlation Coefficient

Very good diversification

The 3 months correlation between COMBA and Colgate is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding COMBA TELECOM SYST and Colgate Palmolive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Colgate Palmolive 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 Colgate Palmolive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Colgate Palmolive has no effect on the direction of COMBA TELECOM i.e., COMBA TELECOM and Colgate Palmolive go up and down completely randomly.

Pair Corralation between COMBA TELECOM and Colgate Palmolive

Assuming the 90 days trading horizon COMBA TELECOM SYST is expected to generate 2.71 times more return on investment than Colgate Palmolive. However, COMBA TELECOM is 2.71 times more volatile than Colgate Palmolive. It trades about 0.15 of its potential returns per unit of risk. Colgate Palmolive is currently generating about -0.08 per unit of risk. If you would invest  13.00  in COMBA TELECOM SYST on November 23, 2024 and sell it today you would earn a total of  3.00  from holding COMBA TELECOM SYST or generate 23.08% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy97.5%
ValuesDaily Returns

COMBA TELECOM SYST  vs.  Colgate Palmolive

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -25-20-15-10-505
JavaScript chart by amCharts 3.21.15COA1 CPA
       Timeline  
COMBA TELECOM SYST 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in COMBA TELECOM SYST are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, COMBA TELECOM unveiled solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.120.1250.130.1350.140.1450.150.1550.16
Colgate Palmolive 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Colgate Palmolive has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb828486889092

COMBA TELECOM and Colgate Palmolive Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-10.14-7.59-5.05-2.50.02.675.428.1810.9413.69 0.050.100.150.20
JavaScript chart by amCharts 3.21.15COA1 CPA
       Returns  

Pair Trading with COMBA TELECOM and Colgate Palmolive

The main advantage of trading using opposite COMBA TELECOM and Colgate Palmolive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COMBA TELECOM position performs unexpectedly, Colgate Palmolive 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 Colgate Palmolive will offset losses from the drop in Colgate Palmolive's long position.
The idea behind COMBA TELECOM SYST and Colgate Palmolive pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.

Other Complementary Tools

Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges
Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets