Correlation Between Optical Cable and Telesat Corp
Can any of the company-specific risk be diversified away by investing in both Optical Cable and Telesat Corp 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 Optical Cable and Telesat Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Optical Cable and Telesat Corp, you can compare the effects of market volatilities on Optical Cable and Telesat Corp 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 Optical Cable with a short position of Telesat Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Optical Cable and Telesat Corp.
Diversification Opportunities for Optical Cable and Telesat Corp
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Optical and Telesat is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Optical Cable and Telesat Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telesat Corp and Optical Cable 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 Optical Cable are associated (or correlated) with Telesat Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telesat Corp has no effect on the direction of Optical Cable i.e., Optical Cable and Telesat Corp go up and down completely randomly.
Pair Corralation between Optical Cable and Telesat Corp
Considering the 90-day investment horizon Optical Cable is expected to generate 10.08 times more return on investment than Telesat Corp. However, Optical Cable is 10.08 times more volatile than Telesat Corp. It trades about 0.04 of its potential returns per unit of risk. Telesat Corp is currently generating about 0.05 per unit of risk. If you would invest 410.00 in Optical Cable on August 31, 2024 and sell it today you would lose (177.00) from holding Optical Cable or give up 43.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Optical Cable vs. Telesat Corp
Performance |
| Timeline |
| Optical Cable |
| Telesat Corp |
Optical Cable and Telesat Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Optical Cable and Telesat Corp
The main advantage of trading using opposite Optical Cable and Telesat Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Optical Cable position performs unexpectedly, Telesat Corp 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 Telesat Corp will offset losses from the drop in Telesat Corp's long position.| Optical Cable vs. KVH Industries | Optical Cable vs. Knowles Cor | Optical Cable vs. Comtech Telecommunications Corp | Optical Cable vs. Lantronix |
| Telesat Corp vs. KVH Industries | Telesat Corp vs. Comtech Telecommunications Corp | Telesat Corp vs. Knowles Cor | Telesat Corp vs. Ituran Location and |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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