Correlation Between G III and Comba Telecom
Can any of the company-specific risk be diversified away by investing in both G III and Comba Telecom 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 G III and Comba Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between G III Apparel Group and Comba Telecom Systems, you can compare the effects of market volatilities on G III and Comba Telecom 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 G III with a short position of Comba Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of G III and Comba Telecom.
Diversification Opportunities for G III and Comba Telecom
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GI4 and Comba is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding G III Apparel Group and Comba Telecom Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comba Telecom Systems and G III 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 G III Apparel Group are associated (or correlated) with Comba Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comba Telecom Systems has no effect on the direction of G III i.e., G III and Comba Telecom go up and down completely randomly.
Pair Corralation between G III and Comba Telecom
Assuming the 90 days trading horizon G III Apparel Group is expected to generate 0.63 times more return on investment than Comba Telecom. However, G III Apparel Group is 1.59 times less risky than Comba Telecom. It trades about 0.08 of its potential returns per unit of risk. Comba Telecom Systems is currently generating about 0.02 per unit of risk. If you would invest 1,220 in G III Apparel Group on September 13, 2024 and sell it today you would earn a total of 2,060 from holding G III Apparel Group or generate 168.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
G III Apparel Group vs. Comba Telecom Systems
Performance |
| Timeline |
| G III Apparel |
| Comba Telecom Systems |
G III and Comba Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G III and Comba Telecom
The main advantage of trading using opposite G III and Comba Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G III position performs unexpectedly, Comba Telecom 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 Comba Telecom will offset losses from the drop in Comba Telecom's long position.The idea behind G III Apparel Group and Comba Telecom Systems pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Comba Telecom vs. Apple Inc | Comba Telecom vs. Apple Inc | Comba Telecom vs. Apple Inc | Comba Telecom vs. Apple Inc |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |