Correlation Between Comba Telecom and Addtech AB
Can any of the company-specific risk be diversified away by investing in both Comba Telecom and Addtech AB 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 Addtech AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Comba Telecom Systems and Addtech AB, you can compare the effects of market volatilities on Comba Telecom and Addtech AB 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 Addtech AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comba Telecom and Addtech AB.
Diversification Opportunities for Comba Telecom and Addtech AB
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Comba and Addtech is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Comba Telecom Systems and Addtech AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addtech AB 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 Systems are associated (or correlated) with Addtech AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Addtech AB has no effect on the direction of Comba Telecom i.e., Comba Telecom and Addtech AB go up and down completely randomly.
Pair Corralation between Comba Telecom and Addtech AB
Assuming the 90 days trading horizon Comba Telecom Systems is expected to generate 3.06 times more return on investment than Addtech AB. However, Comba Telecom is 3.06 times more volatile than Addtech AB. It trades about 0.02 of its potential returns per unit of risk. Addtech AB is currently generating about -0.06 per unit of risk. If you would invest 12.00 in Comba Telecom Systems on October 12, 2024 and sell it today you would earn a total of 0.00 from holding Comba Telecom Systems or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Comba Telecom Systems vs. Addtech AB
Performance |
| Timeline |
| Comba Telecom Systems |
| Addtech AB |
Comba Telecom and Addtech AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comba Telecom and Addtech AB
The main advantage of trading using opposite Comba Telecom and Addtech AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comba Telecom position performs unexpectedly, Addtech AB 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 Addtech AB will offset losses from the drop in Addtech AB's long position.| Comba Telecom vs. Nok Airlines PCL | Comba Telecom vs. CSSC Offshore Marine | Comba Telecom vs. Solstad Offshore ASA | Comba Telecom vs. International Consolidated Airlines |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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