Correlation Between Electronic Systems and Telesat Corp

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

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

Diversification Opportunities for Electronic Systems and Telesat Corp

-0.8

Correlation Coefficient

Electronic Systems  Telesat Corp

Pay attention - limited upside

The 3 months correlation between Electronic and Telesat is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Electronic Systems Technology and Telesat Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telesat Corp and Electronic Systems 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 Electronic Systems Technology 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 Electronic Systems i.e., Electronic Systems and Telesat Corp go up and down completely randomly.

Pair Corralation between Electronic Systems and Telesat Corp

Given the investment horizon of 90 days Electronic Systems Technology is expected to under-perform the Telesat Corp. In addition to that, Electronic Systems is 1.25 times more volatile than Telesat Corp. It trades about -0.17 of its total potential returns per unit of risk. Telesat Corp is currently generating about 0.12 per unit of volatility. If you would invest  1,346  in Telesat Corp on November 29, 2024 and sell it today you would earn a total of  438.00  from holding Telesat Corp or generate 32.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.33%
Values	Daily Returns

Electronic Systems Technology  vs.  Telesat Corp

Electronic Systems

Risk-Adjusted Performance

Very Weak

Over the last 90 days Electronic Systems Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Telesat Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Telesat Corp are ranked lower than 9 (%) 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 Electronic Systems and Telesat Corp

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

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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.