Correlation Between COMBA TELECOM and JERONIMO MARTINS
Can any of the company-specific risk be diversified away by investing in both COMBA TELECOM and JERONIMO MARTINS 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 JERONIMO MARTINS 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 JERONIMO MARTINS UNADR2, you can compare the effects of market volatilities on COMBA TELECOM and JERONIMO MARTINS 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 JERONIMO MARTINS. Check out your portfolio center. Please also check ongoing floating volatility patterns of COMBA TELECOM and JERONIMO MARTINS.
Diversification Opportunities for COMBA TELECOM and JERONIMO MARTINS
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between COMBA and JERONIMO is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding COMBA TELECOM SYST and JERONIMO MARTINS UNADR2 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JERONIMO MARTINS UNADR2 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 JERONIMO MARTINS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JERONIMO MARTINS UNADR2 has no effect on the direction of COMBA TELECOM i.e., COMBA TELECOM and JERONIMO MARTINS go up and down completely randomly.
Pair Corralation between COMBA TELECOM and JERONIMO MARTINS
Assuming the 90 days trading horizon COMBA TELECOM SYST is expected to generate 1.12 times more return on investment than JERONIMO MARTINS. However, COMBA TELECOM is 1.12 times more volatile than JERONIMO MARTINS UNADR2. It trades about 0.06 of its potential returns per unit of risk. JERONIMO MARTINS UNADR2 is currently generating about -0.03 per unit of risk. If you would invest 9.65 in COMBA TELECOM SYST on September 25, 2024 and sell it today you would earn a total of 3.35 from holding COMBA TELECOM SYST or generate 34.72% 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. JERONIMO MARTINS UNADR2
Performance |
| Timeline |
| COMBA TELECOM SYST |
| JERONIMO MARTINS UNADR2 |
COMBA TELECOM and JERONIMO MARTINS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COMBA TELECOM and JERONIMO MARTINS
The main advantage of trading using opposite COMBA TELECOM and JERONIMO MARTINS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COMBA TELECOM position performs unexpectedly, JERONIMO MARTINS 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 JERONIMO MARTINS will offset losses from the drop in JERONIMO MARTINS's long position.| COMBA TELECOM vs. Apple Inc | COMBA TELECOM vs. Apple Inc | COMBA TELECOM vs. Apple Inc | COMBA TELECOM vs. Microsoft |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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