Correlation Between COMBA TELECOM and Identiv
Can any of the company-specific risk be diversified away by investing in both COMBA TELECOM and Identiv 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 Identiv 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 Identiv, you can compare the effects of market volatilities on COMBA TELECOM and Identiv 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 Identiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of COMBA TELECOM and Identiv.
Diversification Opportunities for COMBA TELECOM and Identiv
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between COMBA and Identiv is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding COMBA TELECOM SYST and Identiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Identiv 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 Identiv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Identiv has no effect on the direction of COMBA TELECOM i.e., COMBA TELECOM and Identiv go up and down completely randomly.
Pair Corralation between COMBA TELECOM and Identiv
Assuming the 90 days trading horizon COMBA TELECOM SYST is expected to generate 0.54 times more return on investment than Identiv. However, COMBA TELECOM SYST is 1.85 times less risky than Identiv. It trades about 0.0 of its potential returns per unit of risk. Identiv is currently generating about -0.02 per unit of risk. If you would invest 14.00 in COMBA TELECOM SYST on October 16, 2024 and sell it today you would lose (1.00) from holding COMBA TELECOM SYST or give up 7.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
COMBA TELECOM SYST vs. Identiv
Performance |
| Timeline |
| COMBA TELECOM SYST |
| Identiv |
COMBA TELECOM and Identiv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COMBA TELECOM and Identiv
The main advantage of trading using opposite COMBA TELECOM and Identiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COMBA TELECOM position performs unexpectedly, Identiv 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 Identiv will offset losses from the drop in Identiv's long position.| COMBA TELECOM vs. SERI INDUSTRIAL EO | COMBA TELECOM vs. China Datang | COMBA TELECOM vs. Hyrican Informationssysteme Aktiengesellschaft | COMBA TELECOM vs. Perseus Mining Limited |
| Identiv vs. Highlight Communications AG | Identiv vs. BII Railway Transportation | Identiv vs. COMBA TELECOM SYST | Identiv vs. BROADWIND ENRGY |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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