Correlation Between AstroNova and RF Industries
Can any of the company-specific risk be diversified away by investing in both AstroNova and RF Industries 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 AstroNova and RF Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AstroNova and RF Industries, you can compare the effects of market volatilities on AstroNova and RF Industries 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 AstroNova with a short position of RF Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of AstroNova and RF Industries.
Diversification Opportunities for AstroNova and RF Industries
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between AstroNova and RFIL is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding AstroNova and RF Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RF Industries and AstroNova 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 AstroNova are associated (or correlated) with RF Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RF Industries has no effect on the direction of AstroNova i.e., AstroNova and RF Industries go up and down completely randomly.
Pair Corralation between AstroNova and RF Industries
Given the investment horizon of 90 days AstroNova is expected to under-perform the RF Industries. But the stock apears to be less risky and, when comparing its historical volatility, AstroNova is 1.84 times less risky than RF Industries. The stock trades about -0.04 of its potential returns per unit of risk. The RF Industries is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 408.00 in RF Industries on November 4, 2024 and sell it today you would earn a total of 115.00 from holding RF Industries or generate 28.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AstroNova vs. RF Industries
Performance |
| Timeline |
| AstroNova |
| RF Industries |
AstroNova and RF Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AstroNova and RF Industries
The main advantage of trading using opposite AstroNova and RF Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AstroNova position performs unexpectedly, RF Industries 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 RF Industries will offset losses from the drop in RF Industries' long position.| AstroNova vs. Key Tronic | AstroNova vs. Identiv | AstroNova vs. Red Cat Holdings | AstroNova vs. TransAct Technologies Incorporated |
| RF Industries vs. Nortech Systems Incorporated | RF Industries vs. Richardson Electronics | RF Industries vs. AstroNova |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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