Correlation Between Telesat Corp and Electronic Systems

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

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

Diversification Opportunities for Telesat Corp and Electronic Systems

-0.28

Correlation Coefficient

Telesat Corp  Electronic Systems

Very good diversification

The 3 months correlation between Telesat and Electronic is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Telesat Corp and Electronic Systems Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electronic Systems and Telesat Corp 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 Telesat Corp are associated (or correlated) with Electronic Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electronic Systems has no effect on the direction of Telesat Corp i.e., Telesat Corp and Electronic Systems go up and down completely randomly.

Pair Corralation between Telesat Corp and Electronic Systems

Given the investment horizon of 90 days Telesat Corp is expected to generate 0.74 times more return on investment than Electronic Systems. However, Telesat Corp is 1.36 times less risky than Electronic Systems. It trades about 0.07 of its potential returns per unit of risk. Electronic Systems Technology is currently generating about 0.01 per unit of risk. If you would invest  1,633  in Telesat Corp on December 30, 2024 and sell it today you would earn a total of  275.00  from holding Telesat Corp or generate 16.84% return on investment over 90 days.

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

Telesat Corp  vs.  Electronic Systems Technology

Telesat Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Telesat Corp are ranked lower than 5 (%) 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.

Electronic Systems

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Electronic Systems Technology are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Electronic Systems may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Telesat Corp and Electronic Systems

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

The idea behind Telesat Corp and Electronic Systems Technology 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.