Correlation Between Comba Telecom and Kering SA
Can any of the company-specific risk be diversified away by investing in both Comba Telecom and Kering SA 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 Kering SA 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 Kering SA, you can compare the effects of market volatilities on Comba Telecom and Kering SA 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 Kering SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comba Telecom and Kering SA.
Diversification Opportunities for Comba Telecom and Kering SA
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Comba and Kering is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Comba Telecom Systems and Kering SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kering SA 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 Kering SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kering SA has no effect on the direction of Comba Telecom i.e., Comba Telecom and Kering SA go up and down completely randomly.
Pair Corralation between Comba Telecom and Kering SA
Assuming the 90 days trading horizon Comba Telecom Systems is expected to under-perform the Kering SA. In addition to that, Comba Telecom is 1.36 times more volatile than Kering SA. It trades about -0.07 of its total potential returns per unit of risk. Kering SA is currently generating about -0.06 per unit of volatility. If you would invest 23,390 in Kering SA on September 5, 2024 and sell it today you would lose (1,260) from holding Kering SA or give up 5.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Comba Telecom Systems vs. Kering SA
Performance |
| Timeline |
| Comba Telecom Systems |
| Kering SA |
Comba Telecom and Kering SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comba Telecom and Kering SA
The main advantage of trading using opposite Comba Telecom and Kering SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comba Telecom position performs unexpectedly, Kering SA 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 Kering SA will offset losses from the drop in Kering SA's long position.| Comba Telecom vs. TOTAL GABON | Comba Telecom vs. Walgreens Boots Alliance | Comba Telecom vs. Peak Resources Limited |
| Kering SA vs. Comba Telecom Systems | Kering SA vs. United Internet AG | Kering SA vs. Cogent Communications Holdings | Kering SA vs. BOSTON BEER A |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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