Correlation Between AVITA Medical and COMBA TELECOM

Can any of the company-specific risk be diversified away by investing in both AVITA Medical 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 AVITA Medical and COMBA TELECOM into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AVITA Medical and COMBA TELECOM SYST, you can compare the effects of market volatilities on AVITA Medical 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 AVITA Medical with a short position of COMBA TELECOM. Check out your portfolio center. Please also check ongoing floating volatility patterns of AVITA Medical and COMBA TELECOM.

Diversification Opportunities for AVITA Medical and COMBA TELECOM

-0.4

Correlation Coefficient

AVITA Medical  COMBA TELECOM

Very good diversification

The 3 months correlation between AVITA and COMBA is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding AVITA Medical and COMBA TELECOM SYST in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COMBA TELECOM SYST and AVITA Medical 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 AVITA Medical 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 SYST has no effect on the direction of AVITA Medical i.e., AVITA Medical and COMBA TELECOM go up and down completely randomly.

Pair Corralation between AVITA Medical and COMBA TELECOM

Assuming the 90 days trading horizon AVITA Medical is expected to under-perform the COMBA TELECOM. In addition to that, AVITA Medical is 1.4 times more volatile than COMBA TELECOM SYST. It trades about -0.12 of its total potential returns per unit of risk. COMBA TELECOM SYST is currently generating about 0.17 per unit of volatility. If you would invest  15.00  in COMBA TELECOM SYST on December 30, 2024 and sell it today you would earn a total of  6.00  from holding COMBA TELECOM SYST or generate 40.0% return on investment over 90 days.

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

AVITA Medical  vs.  COMBA TELECOM SYST

AVITA Medical

Risk-Adjusted Performance

Very Weak

Over the last 90 days AVITA Medical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's forward-looking signals remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

COMBA TELECOM SYST

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in COMBA TELECOM SYST are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, COMBA TELECOM unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AVITA Medical and COMBA TELECOM

The main advantage of trading using opposite AVITA Medical and COMBA TELECOM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AVITA Medical 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 AVITA Medical and COMBA TELECOM SYST 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.