Correlation Between Comtech Telecommunicatio and InterDigital

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

Diversification Opportunities for Comtech Telecommunicatio and InterDigital

0.36

Correlation Coefficient

Comtech Telecommunicatio  InterDigital

Weak diversification

The 3 months correlation between Comtech and InterDigital is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Comtech Telecommunications Cor and InterDigital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InterDigital 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 InterDigital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InterDigital has no effect on the direction of Comtech Telecommunicatio i.e., Comtech Telecommunicatio and InterDigital go up and down completely randomly.

Pair Corralation between Comtech Telecommunicatio and InterDigital

Given the investment horizon of 90 days Comtech Telecommunications Corp is expected to generate 2.85 times more return on investment than InterDigital. However, Comtech Telecommunicatio is 2.85 times more volatile than InterDigital. It trades about 0.13 of its potential returns per unit of risk. InterDigital is currently generating about 0.2 per unit of risk. If you would invest  148.00  in Comtech Telecommunications Corp on May 8, 2025 and sell it today you would earn a total of  69.00  from holding Comtech Telecommunications Corp or generate 46.62% return on investment over 90 days.

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

Comtech Telecommunications Cor  vs.  InterDigital

Comtech Telecommunicatio

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Comtech Telecommunications Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating basic indicators, Comtech Telecommunicatio disclosed solid returns over the last few months and may actually be approaching a breakup point.

InterDigital

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in InterDigital are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, InterDigital exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Comtech Telecommunicatio and InterDigital

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

The idea behind Comtech Telecommunications Corp and InterDigital 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.