Correlation Between Comtech Telecommunicatio and Wegener

Can any of the company-specific risk be diversified away by investing in both Comtech Telecommunicatio and Wegener 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 Wegener 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 Wegener, you can compare the effects of market volatilities on Comtech Telecommunicatio and Wegener 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 Wegener. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comtech Telecommunicatio and Wegener.

Diversification Opportunities for Comtech Telecommunicatio and Wegener

-0.2

Correlation Coefficient

Comtech Telecommunicatio  Wegener

Good diversification

The 3 months correlation between Comtech and Wegener is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Comtech Telecommunications Cor and Wegener in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wegener 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 Wegener. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wegener has no effect on the direction of Comtech Telecommunicatio i.e., Comtech Telecommunicatio and Wegener go up and down completely randomly.

Pair Corralation between Comtech Telecommunicatio and Wegener

If you would invest  304.00  in Comtech Telecommunications Corp on September 3, 2024 and sell it today you would earn a total of  35.00  from holding Comtech Telecommunications Corp or generate 11.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Comtech Telecommunications Cor  vs.  Wegener

Comtech Telecommunicatio

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Comtech Telecommunications Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent basic indicators, Comtech Telecommunicatio disclosed solid returns over the last few months and may actually be approaching a breakup point.

Wegener

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wegener has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Wegener is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Comtech Telecommunicatio and Wegener

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

The idea behind Comtech Telecommunications Corp and Wegener 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.