Correlation Between COMBA TELECOM and BURLINGTON STORES

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

Diversification Opportunities for COMBA TELECOM and BURLINGTON STORES

0.2

Correlation Coefficient

COMBA TELECOM  BURLINGTON STORES

Modest diversification

The 3 months correlation between COMBA and BURLINGTON is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding COMBA TELECOM SYST and BURLINGTON STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BURLINGTON STORES 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 BURLINGTON STORES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BURLINGTON STORES has no effect on the direction of COMBA TELECOM i.e., COMBA TELECOM and BURLINGTON STORES go up and down completely randomly.

Pair Corralation between COMBA TELECOM and BURLINGTON STORES

Assuming the 90 days trading horizon COMBA TELECOM SYST is expected to generate 0.91 times more return on investment than BURLINGTON STORES. However, COMBA TELECOM SYST is 1.1 times less risky than BURLINGTON STORES. It trades about 0.14 of its potential returns per unit of risk. BURLINGTON STORES is currently generating about 0.0 per unit of risk. If you would invest  17.00  in COMBA TELECOM SYST on May 15, 2025 and sell it today you would earn a total of  3.00  from holding COMBA TELECOM SYST or generate 17.65% return on investment over 90 days.

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

COMBA TELECOM SYST  vs.  BURLINGTON STORES

COMBA TELECOM SYST

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in COMBA TELECOM SYST 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.

BURLINGTON STORES

Risk-Adjusted Performance

Weakest

Over the last 90 days BURLINGTON STORES has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward indicators, BURLINGTON STORES is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with COMBA TELECOM and BURLINGTON STORES

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

The idea behind COMBA TELECOM SYST and BURLINGTON STORES 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.

Check out your portfolio center.

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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.