Correlation Between Comba Telecom and METHODE ELECTRONICS
Can any of the company-specific risk be diversified away by investing in both Comba Telecom and METHODE ELECTRONICS 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 METHODE ELECTRONICS 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 METHODE ELECTRONICS, you can compare the effects of market volatilities on Comba Telecom and METHODE ELECTRONICS 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 METHODE ELECTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comba Telecom and METHODE ELECTRONICS.
Diversification Opportunities for Comba Telecom and METHODE ELECTRONICS
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Comba and METHODE is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Comba Telecom Systems and METHODE ELECTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on METHODE ELECTRONICS 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 METHODE ELECTRONICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of METHODE ELECTRONICS has no effect on the direction of Comba Telecom i.e., Comba Telecom and METHODE ELECTRONICS go up and down completely randomly.
Pair Corralation between Comba Telecom and METHODE ELECTRONICS
Assuming the 90 days trading horizon Comba Telecom Systems is expected to generate 1.26 times more return on investment than METHODE ELECTRONICS. However, Comba Telecom is 1.26 times more volatile than METHODE ELECTRONICS. It trades about 0.02 of its potential returns per unit of risk. METHODE ELECTRONICS is currently generating about -0.06 per unit of risk. If you would invest 14.00 in Comba Telecom Systems on August 31, 2024 and sell it today you would lose (3.00) from holding Comba Telecom Systems or give up 21.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Comba Telecom Systems vs. METHODE ELECTRONICS
Performance |
| Timeline |
| Comba Telecom Systems |
| METHODE ELECTRONICS |
Comba Telecom and METHODE ELECTRONICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comba Telecom and METHODE ELECTRONICS
The main advantage of trading using opposite Comba Telecom and METHODE ELECTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comba Telecom position performs unexpectedly, METHODE ELECTRONICS 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 METHODE ELECTRONICS will offset losses from the drop in METHODE ELECTRONICS's long position.| Comba Telecom vs. MeVis Medical Solutions | Comba Telecom vs. Carsales | Comba Telecom vs. GungHo Online Entertainment | Comba Telecom vs. SAFETY MEDICAL PROD |
| METHODE ELECTRONICS vs. SOLSTAD OFFSHORE NK | METHODE ELECTRONICS vs. Infrastrutture Wireless Italiane | METHODE ELECTRONICS vs. Tower One Wireless | METHODE ELECTRONICS vs. 24SEVENOFFICE GROUP AB |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |