Correlation Between Comtech Telecommunicatio and Telesat Corp

Can any of the company-specific risk be diversified away by investing in both Comtech Telecommunicatio 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 Comtech Telecommunicatio and Telesat Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Comtech Telecommunications Corp and Telesat Corp, you can compare the effects of market volatilities on Comtech Telecommunicatio 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 Comtech Telecommunicatio with a short position of Telesat Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comtech Telecommunicatio and Telesat Corp.

Diversification Opportunities for Comtech Telecommunicatio and Telesat Corp

-0.44

Correlation Coefficient

Comtech Telecommunicatio  Telesat Corp

Very good diversification

The 3 months correlation between Comtech and Telesat is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Comtech Telecommunications Cor and Telesat Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telesat Corp and Comtech Telecommunicatio 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 Comtech Telecommunications Corp 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 Comtech Telecommunicatio i.e., Comtech Telecommunicatio and Telesat Corp go up and down completely randomly.

Pair Corralation between Comtech Telecommunicatio and Telesat Corp

Given the investment horizon of 90 days Comtech Telecommunications Corp is expected to under-perform the Telesat Corp. In addition to that, Comtech Telecommunicatio is 1.52 times more volatile than Telesat Corp. It trades about -0.12 of its total potential returns per unit of risk. Telesat Corp is currently generating about 0.07 per unit of volatility. If you would invest  1,633  in Telesat Corp on December 29, 2024 and sell it today you would earn a total of  275.00  from holding Telesat Corp or generate 16.84% return on investment over 90 days.

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

Comtech Telecommunications Cor  vs.  Telesat Corp

Comtech Telecommunicatio

Risk-Adjusted Performance

Very Weak

Over the last 90 days Comtech Telecommunications Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Telesat Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Telesat Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Telesat Corp unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Comtech Telecommunicatio and Telesat Corp

The main advantage of trading using opposite Comtech Telecommunicatio and Telesat Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comtech Telecommunicatio 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.

The idea behind Comtech Telecommunications Corp and Telesat 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.

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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.