Correlation Between Maxeon Solar and Comtech Telecommunicatio

Can any of the company-specific risk be diversified away by investing in both Maxeon Solar and Comtech Telecommunicatio 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 Maxeon Solar and Comtech Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Maxeon Solar Technologies and Comtech Telecommunications Corp, you can compare the effects of market volatilities on Maxeon Solar and Comtech Telecommunicatio 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 Maxeon Solar with a short position of Comtech Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maxeon Solar and Comtech Telecommunicatio.

Diversification Opportunities for Maxeon Solar and Comtech Telecommunicatio

-0.42

Correlation Coefficient

Maxeon Solar  Comtech Telecommunicatio

Very good diversification

The 3 months correlation between Maxeon and Comtech is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Maxeon Solar Technologies and Comtech Telecommunications Cor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comtech Telecommunicatio and Maxeon Solar 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 Maxeon Solar Technologies are associated (or correlated) with Comtech Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comtech Telecommunicatio has no effect on the direction of Maxeon Solar i.e., Maxeon Solar and Comtech Telecommunicatio go up and down completely randomly.

Pair Corralation between Maxeon Solar and Comtech Telecommunicatio

Given the investment horizon of 90 days Maxeon Solar is expected to generate 5.49 times less return on investment than Comtech Telecommunicatio. In addition to that, Maxeon Solar is 1.16 times more volatile than Comtech Telecommunications Corp. It trades about 0.05 of its total potential returns per unit of risk. Comtech Telecommunications Corp is currently generating about 0.31 per unit of volatility. If you would invest  300.00  in Comtech Telecommunications Corp on July 8, 2024 and sell it today you would earn a total of  144.00  from holding Comtech Telecommunications Corp or generate 48.0% return on investment over 90 days.

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

Maxeon Solar Technologies  vs.  Comtech Telecommunications Cor

Maxeon Solar Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Maxeon Solar Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in November 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Comtech Telecommunicatio

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Comtech Telecommunications Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Comtech Telecommunicatio disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Maxeon Solar and Comtech Telecommunicatio

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

The idea behind Maxeon Solar Technologies and Comtech Telecommunications Corp 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.