Correlation Between Comba Telecom and Northern Data

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

By analyzing existing cross correlation between Comba Telecom Systems and Northern Data AG, you can compare the effects of market volatilities on Comba Telecom and Northern Data 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 Northern Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comba Telecom and Northern Data.

Diversification Opportunities for Comba Telecom and Northern Data

-0.23

Correlation Coefficient

Comba Telecom  Northern Data

Very good diversification

The 3 months correlation between Comba and Northern is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Comba Telecom Systems and Northern Data AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Data AG 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 Systems are associated (or correlated) with Northern Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Data AG has no effect on the direction of Comba Telecom i.e., Comba Telecom and Northern Data go up and down completely randomly.

Pair Corralation between Comba Telecom and Northern Data

Assuming the 90 days trading horizon Comba Telecom Systems is expected to generate 0.87 times more return on investment than Northern Data. However, Comba Telecom Systems is 1.15 times less risky than Northern Data. It trades about 0.13 of its potential returns per unit of risk. Northern Data AG is currently generating about -0.03 per unit of risk. If you would invest  16.00  in Comba Telecom Systems on April 20, 2025 and sell it today you would earn a total of  4.00  from holding Comba Telecom Systems or generate 25.0% return on investment over 90 days.

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

Comba Telecom Systems  vs.  Northern Data AG

Comba Telecom Systems

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Comba Telecom Systems are ranked lower than 10 (%) 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.

Northern Data AG

Risk-Adjusted Performance

Very Weak

Over the last 90 days Northern Data AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile 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 Comba Telecom and Northern Data

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

The idea behind Comba Telecom Systems and Northern Data AG 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.