Correlation Between MASI AGRICOLA and Comba Telecom

Can any of the company-specific risk be diversified away by investing in both MASI AGRICOLA 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 MASI AGRICOLA and Comba Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MASI AGRICOLA SPA and Comba Telecom Systems, you can compare the effects of market volatilities on MASI AGRICOLA 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 MASI AGRICOLA with a short position of Comba Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of MASI AGRICOLA and Comba Telecom.

Diversification Opportunities for MASI AGRICOLA and Comba Telecom

0.44

Correlation Coefficient

MASI AGRICOLA  Comba Telecom

Very weak diversification

The 3 months correlation between MASI and Comba is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding MASI AGRICOLA SPA 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 MASI AGRICOLA 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 MASI AGRICOLA SPA 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 MASI AGRICOLA i.e., MASI AGRICOLA and Comba Telecom go up and down completely randomly.

Pair Corralation between MASI AGRICOLA and Comba Telecom

Assuming the 90 days horizon MASI AGRICOLA is expected to generate 4.86 times less return on investment than Comba Telecom. But when comparing it to its historical volatility, MASI AGRICOLA SPA is 2.17 times less risky than Comba Telecom. It trades about 0.17 of its potential returns per unit of risk. Comba Telecom Systems is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest  10.00  in Comba Telecom Systems on October 5, 2024 and sell it today you would earn a total of  3.00  from holding Comba Telecom Systems or generate 30.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

MASI AGRICOLA SPA  vs.  Comba Telecom Systems

MASI AGRICOLA SPA

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days MASI AGRICOLA SPA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, MASI AGRICOLA is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Comba Telecom Systems

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Comba Telecom Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Comba Telecom is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with MASI AGRICOLA and Comba Telecom

The main advantage of trading using opposite MASI AGRICOLA and Comba Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MASI AGRICOLA 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 MASI AGRICOLA SPA 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.

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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.