Correlation Between Ezenia and Comtech Telecommunicatio

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

By analyzing existing cross correlation between Ezenia Inc and Comtech Telecommunications Corp, you can compare the effects of market volatilities on Ezenia and Comtech Telecommunicatio 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 Ezenia with a short position of Comtech Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ezenia and Comtech Telecommunicatio.

Diversification Opportunities for Ezenia and Comtech Telecommunicatio

0.0

Correlation Coefficient

Ezenia  Comtech Telecommunicatio

Pay attention - limited upside

The 3 months correlation between Ezenia and Comtech is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ezenia Inc and Comtech Telecommunications Cor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comtech Telecommunicatio and Ezenia 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 Ezenia Inc are associated (or correlated) with Comtech Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comtech Telecommunicatio has no effect on the direction of Ezenia i.e., Ezenia and Comtech Telecommunicatio go up and down completely randomly.

Pair Corralation between Ezenia and Comtech Telecommunicatio

If you would invest (100.00) in Ezenia Inc on December 19, 2024 and sell it today you would earn a total of  100.00  from holding Ezenia Inc or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Ezenia Inc  vs.  Comtech Telecommunications Cor

Ezenia Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ezenia Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Ezenia is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Comtech Telecommunicatio

Risk-Adjusted Performance

Very Weak

Over the last 90 days Comtech Telecommunications Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators 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.

Pair Trading with Ezenia and Comtech Telecommunicatio

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

The idea behind Ezenia Inc and Comtech Telecommunications 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.