Correlation Between APT Satellite and COMSovereign Holding

Can any of the company-specific risk be diversified away by investing in both APT Satellite and COMSovereign Holding 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 APT Satellite and COMSovereign Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between APT Satellite Holdings and COMSovereign Holding Corp, you can compare the effects of market volatilities on APT Satellite and COMSovereign Holding 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 APT Satellite with a short position of COMSovereign Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of APT Satellite and COMSovereign Holding.

Diversification Opportunities for APT Satellite and COMSovereign Holding

-0.38

Correlation Coefficient

APT Satellite  COMSovereign Holding

Very good diversification

The 3 months correlation between APT and COMSovereign is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding APT Satellite Holdings and COMSovereign Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COMSovereign Holding Corp and APT Satellite 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 APT Satellite Holdings are associated (or correlated) with COMSovereign Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COMSovereign Holding Corp has no effect on the direction of APT Satellite i.e., APT Satellite and COMSovereign Holding go up and down completely randomly.

Pair Corralation between APT Satellite and COMSovereign Holding

Assuming the 90 days horizon APT Satellite Holdings is expected to generate 1.36 times more return on investment than COMSovereign Holding. However, APT Satellite is 1.36 times more volatile than COMSovereign Holding Corp. It trades about 0.01 of its potential returns per unit of risk. COMSovereign Holding Corp is currently generating about -0.01 per unit of risk. If you would invest  34.00  in APT Satellite Holdings on October 5, 2024 and sell it today you would lose (6.00) from holding APT Satellite Holdings or give up 17.65% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	57.59%
Values	Daily Returns

APT Satellite Holdings  vs.  COMSovereign Holding Corp

APT Satellite Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

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

COMSovereign Holding Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with APT Satellite and COMSovereign Holding

The main advantage of trading using opposite APT Satellite and COMSovereign Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if APT Satellite position performs unexpectedly, COMSovereign Holding 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 COMSovereign Holding will offset losses from the drop in COMSovereign Holding's long position.

The idea behind APT Satellite Holdings and COMSovereign Holding Corp 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.