Correlation Between Comba Telecom and NEL ASA
Can any of the company-specific risk be diversified away by investing in both Comba Telecom and NEL ASA 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 NEL ASA 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 NEL ASA ADR30, you can compare the effects of market volatilities on Comba Telecom and NEL ASA 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 NEL ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comba Telecom and NEL ASA.
Diversification Opportunities for Comba Telecom and NEL ASA
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Comba and NEL is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Comba Telecom Systems and NEL ASA ADR30 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEL ASA ADR30 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 NEL ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEL ASA ADR30 has no effect on the direction of Comba Telecom i.e., Comba Telecom and NEL ASA go up and down completely randomly.
Pair Corralation between Comba Telecom and NEL ASA
Assuming the 90 days trading horizon Comba Telecom Systems is expected to generate 0.58 times more return on investment than NEL ASA. However, Comba Telecom Systems is 1.71 times less risky than NEL ASA. It trades about -0.14 of its potential returns per unit of risk. NEL ASA ADR30 is currently generating about -0.18 per unit of risk. If you would invest 13.00 in Comba Telecom Systems on August 28, 2024 and sell it today you would lose (2.00) from holding Comba Telecom Systems or give up 15.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Comba Telecom Systems vs. NEL ASA ADR30
Performance |
| Timeline |
| Comba Telecom Systems |
| NEL ASA ADR30 |
Comba Telecom and NEL ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comba Telecom and NEL ASA
The main advantage of trading using opposite Comba Telecom and NEL ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comba Telecom position performs unexpectedly, NEL ASA 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 NEL ASA will offset losses from the drop in NEL ASA's long position.| Comba Telecom vs. Apple Inc | Comba Telecom vs. Apple Inc | Comba Telecom vs. Microsoft | 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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