Correlation Between Comtech Telecommunicatio and Apple

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

Diversification Opportunities for Comtech Telecommunicatio and Apple

  Correlation Coefficient

Excellent diversification

The 3 months correlation between Comtech and Apple is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Comtech Telecommunications Cor and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Comtech Telecommunicatio i.e., Comtech Telecommunicatio and Apple go up and down completely randomly.

Pair Corralation between Comtech Telecommunicatio and Apple

Given the investment horizon of 90 days Comtech Telecommunications Corp is expected to under-perform the Apple. In addition to that, Comtech Telecommunicatio is 1.8 times more volatile than Apple Inc. It trades about -0.02 of its total potential returns per unit of risk. Apple Inc is currently generating about 0.05 per unit of volatility. If you would invest  12,814  in Apple Inc on March 7, 2023 and sell it today you would earn a total of  5,633  from holding Apple Inc or generate 43.96% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
ValuesDaily Returns

Comtech Telecommunications Cor  vs.  Apple Inc

 Performance (%) 
Comtech Telecommunicatio 

Comtech Performance

0 of 100

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 July 2023. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.
Apple Inc 

Apple Performance

17 of 100

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating basic indicators, Apple disclosed solid returns over the last few months and may actually be approaching a breakup point.

Comtech Telecommunicatio and Apple Volatility Contrast

   Predicted Return Density   

Pair Trading with Comtech Telecommunicatio and Apple

The main advantage of trading using opposite Comtech Telecommunicatio and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comtech Telecommunicatio position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.
The idea behind Comtech Telecommunications Corp and Apple 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.
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.

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