Correlation Between Airgain and Edgewater Wireless
Can any of the company-specific risk be diversified away by investing in both Airgain and Edgewater Wireless 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 Airgain and Edgewater Wireless into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Airgain and Edgewater Wireless Systems, you can compare the effects of market volatilities on Airgain and Edgewater Wireless 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 Airgain with a short position of Edgewater Wireless. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airgain and Edgewater Wireless.
Diversification Opportunities for Airgain and Edgewater Wireless
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Airgain and Edgewater is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Airgain and Edgewater Wireless Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edgewater Wireless and Airgain 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 Airgain are associated (or correlated) with Edgewater Wireless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edgewater Wireless has no effect on the direction of Airgain i.e., Airgain and Edgewater Wireless go up and down completely randomly.
Pair Corralation between Airgain and Edgewater Wireless
Given the investment horizon of 90 days Airgain is expected to under-perform the Edgewater Wireless. But the stock apears to be less risky and, when comparing its historical volatility, Airgain is 3.05 times less risky than Edgewater Wireless. The stock trades about -0.13 of its potential returns per unit of risk. The Edgewater Wireless Systems is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 2.90 in Edgewater Wireless Systems on November 3, 2024 and sell it today you would earn a total of 2.41 from holding Edgewater Wireless Systems or generate 83.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Airgain vs. Edgewater Wireless Systems
Performance |
| Timeline |
| Airgain |
| Edgewater Wireless |
Airgain and Edgewater Wireless Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airgain and Edgewater Wireless
The main advantage of trading using opposite Airgain and Edgewater Wireless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airgain position performs unexpectedly, Edgewater Wireless 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 Edgewater Wireless will offset losses from the drop in Edgewater Wireless' long position.The idea behind Airgain and Edgewater Wireless Systems 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.| Edgewater Wireless vs. Airgain | Edgewater Wireless vs. TPT Global Tech | Edgewater Wireless vs. Viavi Solutions | Edgewater Wireless vs. CommScope Holding Co |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |