Correlation Between Hua Hong and Comtech Telecommunicatio

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

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

Diversification Opportunities for Hua Hong and Comtech Telecommunicatio

-0.42

Correlation Coefficient

Hua Hong  Comtech Telecommunicatio

Very good diversification

The 3 months correlation between Hua and Comtech is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Hua Hong Semiconductor and Comtech Telecommunications Cor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comtech Telecommunicatio and Hua Hong 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 Hua Hong Semiconductor are associated (or correlated) with Comtech Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comtech Telecommunicatio has no effect on the direction of Hua Hong i.e., Hua Hong and Comtech Telecommunicatio go up and down completely randomly.

Pair Corralation between Hua Hong and Comtech Telecommunicatio

Assuming the 90 days horizon Hua Hong Semiconductor is expected to generate 0.51 times more return on investment than Comtech Telecommunicatio. However, Hua Hong Semiconductor is 1.97 times less risky than Comtech Telecommunicatio. It trades about 0.04 of its potential returns per unit of risk. Comtech Telecommunications Corp is currently generating about 0.0 per unit of risk. If you would invest  284.00  in Hua Hong Semiconductor on April 20, 2025 and sell it today you would earn a total of  110.00  from holding Hua Hong Semiconductor or generate 38.73% return on investment over 90 days.

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

Hua Hong Semiconductor  vs.  Comtech Telecommunications Cor

Hua Hong Semiconductor

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hua Hong Semiconductor has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Hua Hong is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Comtech Telecommunicatio

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Comtech Telecommunications Corp are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Comtech Telecommunicatio unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hua Hong and Comtech Telecommunicatio

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

The idea behind Hua Hong Semiconductor and Comtech Telecommunications Corp 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.