Correlation Between Com7 PCL and Comanche International

Can any of the company-specific risk be diversified away by investing in both Com7 PCL and Comanche International 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 Com7 PCL and Comanche International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Com7 PCL and Comanche International Public, you can compare the effects of market volatilities on Com7 PCL and Comanche International 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 Com7 PCL with a short position of Comanche International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Com7 PCL and Comanche International.

Diversification Opportunities for Com7 PCL and Comanche International

0.75

Correlation Coefficient

Com7 PCL  Comanche International

Poor diversification

The 3 months correlation between Com7 and Comanche is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Com7 PCL and Comanche International Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comanche International and Com7 PCL 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 Com7 PCL are associated (or correlated) with Comanche International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comanche International has no effect on the direction of Com7 PCL i.e., Com7 PCL and Comanche International go up and down completely randomly.

Pair Corralation between Com7 PCL and Comanche International

Assuming the 90 days trading horizon Com7 PCL is expected to under-perform the Comanche International. But the stock apears to be less risky and, when comparing its historical volatility, Com7 PCL is 4.36 times less risky than Comanche International. The stock trades about -0.19 of its potential returns per unit of risk. The Comanche International Public is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  78.00  in Comanche International Public on December 30, 2024 and sell it today you would lose (15.00) from holding Comanche International Public or give up 19.23% of portfolio value over 90 days.

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

Com7 PCL  vs.  Comanche International Public

Com7 PCL

Risk-Adjusted Performance

Very Weak

Over the last 90 days Com7 PCL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward-looking signals 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.

Comanche International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Comanche International Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Comanche International is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Com7 PCL and Comanche International

The main advantage of trading using opposite Com7 PCL and Comanche International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Com7 PCL position performs unexpectedly, Comanche International 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 Comanche International will offset losses from the drop in Comanche International's long position.

The idea behind Com7 PCL and Comanche International Public 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.