Correlation Between COMBA TELECOM and JAPAN TOBACCO

Can any of the company-specific risk be diversified away by investing in both COMBA TELECOM and JAPAN TOBACCO 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 JAPAN TOBACCO 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 JAPAN TOBACCO UNSPADR12, you can compare the effects of market volatilities on COMBA TELECOM and JAPAN TOBACCO 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 JAPAN TOBACCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of COMBA TELECOM and JAPAN TOBACCO.

Diversification Opportunities for COMBA TELECOM and JAPAN TOBACCO

0.54

Correlation Coefficient

COMBA TELECOM  JAPAN TOBACCO

Very weak diversification

The 3 months correlation between COMBA and JAPAN is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding COMBA TELECOM SYST and JAPAN TOBACCO UNSPADR12 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JAPAN TOBACCO UNSPADR12 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 JAPAN TOBACCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JAPAN TOBACCO UNSPADR12 has no effect on the direction of COMBA TELECOM i.e., COMBA TELECOM and JAPAN TOBACCO go up and down completely randomly.

Pair Corralation between COMBA TELECOM and JAPAN TOBACCO

Assuming the 90 days trading horizon COMBA TELECOM SYST is expected to generate 1.83 times more return on investment than JAPAN TOBACCO. However, COMBA TELECOM is 1.83 times more volatile than JAPAN TOBACCO UNSPADR12. It trades about 0.22 of its potential returns per unit of risk. JAPAN TOBACCO UNSPADR12 is currently generating about 0.06 per unit of risk. If you would invest  16.00  in COMBA TELECOM SYST on July 21, 2025 and sell it today you would earn a total of  16.00  from holding COMBA TELECOM SYST or generate 100.0% 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.  JAPAN TOBACCO UNSPADR12

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 fragile basic indicators, COMBA TELECOM unveiled solid returns over the last few months and may actually be approaching a breakup point.

JAPAN TOBACCO UNSPADR12

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in JAPAN TOBACCO UNSPADR12 are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, JAPAN TOBACCO may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Pair Trading with COMBA TELECOM and JAPAN TOBACCO

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

The idea behind COMBA TELECOM SYST and JAPAN TOBACCO UNSPADR12 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.