Correlation Between Southern Copper and COMBA TELECOM

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

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

Diversification Opportunities for Southern Copper and COMBA TELECOM

0.48

Correlation Coefficient

Southern Copper  COMBA TELECOM

Very weak diversification

The 3 months correlation between Southern and COMBA is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Southern Copper and COMBA TELECOM SYST in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COMBA TELECOM SYST and Southern Copper 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 Southern Copper are associated (or correlated) with COMBA TELECOM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COMBA TELECOM SYST has no effect on the direction of Southern Copper i.e., Southern Copper and COMBA TELECOM go up and down completely randomly.

Pair Corralation between Southern Copper and COMBA TELECOM

Assuming the 90 days horizon Southern Copper is expected to under-perform the COMBA TELECOM. In addition to that, Southern Copper is 1.25 times more volatile than COMBA TELECOM SYST. It trades about -0.17 of its total potential returns per unit of risk. COMBA TELECOM SYST is currently generating about 0.22 per unit of volatility. If you would invest  12.00  in COMBA TELECOM SYST on September 27, 2024 and sell it today you would earn a total of  1.00  from holding COMBA TELECOM SYST or generate 8.33% return on investment over 90 days.

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

Southern Copper  vs.  COMBA TELECOM SYST

Southern Copper

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Southern Copper has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

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 current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Southern Copper and COMBA TELECOM

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

The idea behind Southern Copper and COMBA TELECOM SYST 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.