Correlation Between COMBA TELECOM and Etsy

Can any of the company-specific risk be diversified away by investing in both COMBA TELECOM and Etsy 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 Etsy 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 Etsy Inc, you can compare the effects of market volatilities on COMBA TELECOM and Etsy 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 Etsy. Check out your portfolio center. Please also check ongoing floating volatility patterns of COMBA TELECOM and Etsy.

Diversification Opportunities for COMBA TELECOM and Etsy

-0.38

Correlation Coefficient

COMBA TELECOM  Etsy

Very good diversification

The 3 months correlation between COMBA and Etsy is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding COMBA TELECOM SYST and Etsy Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Etsy Inc 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 Etsy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Etsy Inc has no effect on the direction of COMBA TELECOM i.e., COMBA TELECOM and Etsy go up and down completely randomly.

Pair Corralation between COMBA TELECOM and Etsy

Assuming the 90 days trading horizon COMBA TELECOM is expected to generate 9.8 times less return on investment than Etsy. But when comparing it to its historical volatility, COMBA TELECOM SYST is 1.32 times less risky than Etsy. It trades about 0.01 of its potential returns per unit of risk. Etsy Inc is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  4,914  in Etsy Inc on September 22, 2024 and sell it today you would earn a total of  502.00  from holding Etsy Inc or generate 10.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.48%
Values	Daily Returns

COMBA TELECOM SYST  vs.  Etsy Inc

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

Etsy Inc

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Etsy Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Etsy may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with COMBA TELECOM and Etsy

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

The idea behind COMBA TELECOM SYST and Etsy Inc 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.