Correlation Between COMBA TELECOM and Global Ship

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

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

Diversification Opportunities for COMBA TELECOM and Global Ship

0.55

Correlation Coefficient

COMBA TELECOM  Global Ship

Very weak diversification

The 3 months correlation between COMBA and Global is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding COMBA TELECOM SYST and Global Ship Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Ship Lease and COMBA TELECOM 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 COMBA TELECOM SYST are associated (or correlated) with Global Ship. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Ship Lease has no effect on the direction of COMBA TELECOM i.e., COMBA TELECOM and Global Ship go up and down completely randomly.

Pair Corralation between COMBA TELECOM and Global Ship

Assuming the 90 days trading horizon COMBA TELECOM SYST is expected to generate 1.56 times more return on investment than Global Ship. However, COMBA TELECOM is 1.56 times more volatile than Global Ship Lease. It trades about 0.22 of its potential returns per unit of risk. Global Ship Lease is currently generating about -0.06 per unit of risk. 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

COMBA TELECOM SYST  vs.  Global Ship Lease

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.

Global Ship Lease

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global Ship Lease has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with COMBA TELECOM and Global Ship

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

The idea behind COMBA TELECOM SYST and Global Ship Lease 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .