Correlation Between ClearOne and Telesat Corp

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

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

Diversification Opportunities for ClearOne and Telesat Corp

0.4

Correlation Coefficient

ClearOne  Telesat Corp

Very weak diversification

The 3 months correlation between ClearOne and Telesat is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding ClearOne and Telesat Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telesat Corp and ClearOne 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 ClearOne are associated (or correlated) with Telesat Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telesat Corp has no effect on the direction of ClearOne i.e., ClearOne and Telesat Corp go up and down completely randomly.

Pair Corralation between ClearOne and Telesat Corp

Given the investment horizon of 90 days ClearOne is expected to under-perform the Telesat Corp. In addition to that, ClearOne is 2.0 times more volatile than Telesat Corp. It trades about -0.16 of its total potential returns per unit of risk. Telesat Corp is currently generating about 0.01 per unit of volatility. If you would invest  1,571  in Telesat Corp on February 23, 2025 and sell it today you would lose (4.00) from holding Telesat Corp or give up 0.25% of portfolio value over 90 days.

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

ClearOne  vs.  Telesat Corp

ClearOne

Risk-Adjusted Performance

Very Weak

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

Telesat Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Telesat Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with ClearOne and Telesat Corp

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

The idea behind ClearOne and Telesat 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.