Correlation Between COMBA TELECOM and Liaoning Port

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

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

Diversification Opportunities for COMBA TELECOM and Liaoning Port

-0.14

Correlation Coefficient

COMBA TELECOM  Liaoning Port

Good diversification

The 3 months correlation between COMBA and Liaoning is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding COMBA TELECOM SYST and Liaoning Port CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liaoning Port CoLtd and COMBA TELECOM 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 COMBA TELECOM SYST are associated (or correlated) with Liaoning Port. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liaoning Port CoLtd has no effect on the direction of COMBA TELECOM i.e., COMBA TELECOM and Liaoning Port go up and down completely randomly.

Pair Corralation between COMBA TELECOM and Liaoning Port

Assuming the 90 days trading horizon COMBA TELECOM is expected to generate 15.79 times less return on investment than Liaoning Port. But when comparing it to its historical volatility, COMBA TELECOM SYST is 1.22 times less risky than Liaoning Port. It trades about 0.01 of its potential returns per unit of risk. Liaoning Port CoLtd is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  6.75  in Liaoning Port CoLtd on September 15, 2024 and sell it today you would earn a total of  1.25  from holding Liaoning Port CoLtd or generate 18.52% return on investment over 90 days.

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

COMBA TELECOM SYST  vs.  Liaoning Port CoLtd

COMBA TELECOM SYST

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days COMBA TELECOM SYST 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.

Liaoning Port CoLtd

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Liaoning Port CoLtd are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Liaoning Port reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with COMBA TELECOM and Liaoning Port

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

The idea behind COMBA TELECOM SYST and Liaoning Port CoLtd 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.