Correlation Between Telos Corp and Cemtrex

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

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

Diversification Opportunities for Telos Corp and Cemtrex

-0.33

Correlation Coefficient

Telos Corp  Cemtrex

Very good diversification

The 3 months correlation between Telos and Cemtrex is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Telos Corp and Cemtrex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cemtrex and Telos 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 Telos Corp are associated (or correlated) with Cemtrex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cemtrex has no effect on the direction of Telos Corp i.e., Telos Corp and Cemtrex go up and down completely randomly.

Pair Corralation between Telos Corp and Cemtrex

Considering the 90-day investment horizon Telos Corp is expected to generate 0.41 times more return on investment than Cemtrex. However, Telos Corp is 2.45 times less risky than Cemtrex. It trades about 0.0 of its potential returns per unit of risk. Cemtrex is currently generating about -0.33 per unit of risk. If you would invest  352.00  in Telos Corp on August 30, 2024 and sell it today you would lose (12.00) from holding Telos Corp or give up 3.41% of portfolio value over 90 days.

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

Telos Corp  vs.  Cemtrex

Telos Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Telos Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Telos Corp is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Cemtrex

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cemtrex has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Telos Corp and Cemtrex

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

The idea behind Telos Corp and Cemtrex 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.