Correlation Between Comtech Telecommunicatio and EXFO

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Can any of the company-specific risk be diversified away by investing in both Comtech Telecommunicatio and EXFO 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 Comtech Telecommunicatio and EXFO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Comtech Telecommunications Corp and EXFO Inc, you can compare the effects of market volatilities on Comtech Telecommunicatio and EXFO 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 Comtech Telecommunicatio with a short position of EXFO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comtech Telecommunicatio and EXFO.

Diversification Opportunities for Comtech Telecommunicatio and EXFO

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Comtech and EXFO is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Comtech Telecommunications Cor and EXFO Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EXFO Inc and Comtech Telecommunicatio 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 Comtech Telecommunications Corp are associated (or correlated) with EXFO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EXFO Inc has no effect on the direction of Comtech Telecommunicatio i.e., Comtech Telecommunicatio and EXFO go up and down completely randomly.

Pair Corralation between Comtech Telecommunicatio and EXFO

If you would invest (100.00) in EXFO Inc on December 30, 2023 and sell it today you would earn a total of  100.00  from holding EXFO Inc or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Comtech Telecommunications Cor  vs.  EXFO Inc

 Performance 
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Comtech Telecommunicatio 

Risk-Adjusted Performance

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Over the last 90 days Comtech Telecommunications Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.
EXFO Inc 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days EXFO Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, EXFO is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Comtech Telecommunicatio and EXFO Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Comtech Telecommunicatio and EXFO

The main advantage of trading using opposite Comtech Telecommunicatio and EXFO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comtech Telecommunicatio position performs unexpectedly, EXFO 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 EXFO will offset losses from the drop in EXFO's long position.
The idea behind Comtech Telecommunications Corp and EXFO 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.

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