Correlation Between Comba Telecom and Select Energy
Can any of the company-specific risk be diversified away by investing in both Comba Telecom and Select Energy 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 Select Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Comba Telecom Systems and Select Energy Services, you can compare the effects of market volatilities on Comba Telecom and Select Energy 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 Select Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comba Telecom and Select Energy.
Diversification Opportunities for Comba Telecom and Select Energy
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Comba and Select is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Comba Telecom Systems and Select Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Select Energy Services 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 Systems are associated (or correlated) with Select Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Select Energy Services has no effect on the direction of Comba Telecom i.e., Comba Telecom and Select Energy go up and down completely randomly.
Pair Corralation between Comba Telecom and Select Energy
Assuming the 90 days trading horizon Comba Telecom Systems is expected to generate 2.05 times more return on investment than Select Energy. However, Comba Telecom is 2.05 times more volatile than Select Energy Services. It trades about 0.22 of its potential returns per unit of risk. Select Energy Services is currently generating about -0.36 per unit of risk. If you would invest 11.00 in Comba Telecom Systems on September 25, 2024 and sell it today you would earn a total of 2.00 from holding Comba Telecom Systems or generate 18.18% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Comba Telecom Systems vs. Select Energy Services
Performance |
Timeline |
Comba Telecom Systems |
Select Energy Services |
Comba Telecom and Select Energy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Comba Telecom and Select Energy
The main advantage of trading using opposite Comba Telecom and Select Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comba Telecom position performs unexpectedly, Select Energy 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 Select Energy will offset losses from the drop in Select Energy's long position.Comba Telecom vs. Harmony Gold Mining | Comba Telecom vs. GREENX METALS LTD | Comba Telecom vs. KENNAMETAL INC | Comba Telecom vs. Platinum Investment Management |
Select Energy vs. COMBA TELECOM SYST | Select Energy vs. MGIC INVESTMENT | Select Energy vs. Chunghwa Telecom Co | Select Energy vs. Comba Telecom Systems |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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