Correlation Between COMBA TELECOM and Metallurgicalof China

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

By analyzing existing cross correlation between COMBA TELECOM SYST and Metallurgical of, you can compare the effects of market volatilities on COMBA TELECOM and Metallurgicalof China 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 COMBA TELECOM with a short position of Metallurgicalof China. Check out your portfolio center. Please also check ongoing floating volatility patterns of COMBA TELECOM and Metallurgicalof China.

Diversification Opportunities for COMBA TELECOM and Metallurgicalof China

0.5

Correlation Coefficient

COMBA TELECOM  Metallurgicalof China

Very weak diversification

The 3 months correlation between COMBA and Metallurgicalof is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding COMBA TELECOM SYST and Metallurgical of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metallurgicalof China and COMBA TELECOM 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 COMBA TELECOM SYST are associated (or correlated) with Metallurgicalof China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metallurgicalof China has no effect on the direction of COMBA TELECOM i.e., COMBA TELECOM and Metallurgicalof China go up and down completely randomly.

Pair Corralation between COMBA TELECOM and Metallurgicalof China

Assuming the 90 days trading horizon COMBA TELECOM is expected to generate 1.73 times less return on investment than Metallurgicalof China. But when comparing it to its historical volatility, COMBA TELECOM SYST is 3.43 times less risky than Metallurgicalof China. It trades about 0.22 of its potential returns per unit of risk. Metallurgical of is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  15.00  in Metallurgical of on April 25, 2025 and sell it today you would earn a total of  4.00  from holding Metallurgical of or generate 26.67% return on investment over 90 days.

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

COMBA TELECOM SYST  vs.  Metallurgical of

COMBA TELECOM SYST

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in COMBA TELECOM SYST are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, COMBA TELECOM unveiled solid returns over the last few months and may actually be approaching a breakup point.

Metallurgicalof China

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Metallurgical of are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Metallurgicalof China reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with COMBA TELECOM and Metallurgicalof China

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

The idea behind COMBA TELECOM SYST and Metallurgical of 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .