Correlation Between Aviat Networks and Airgain
Can any of the company-specific risk be diversified away by investing in both Aviat Networks and Airgain 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 Aviat Networks and Airgain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aviat Networks and Airgain, you can compare the effects of market volatilities on Aviat Networks and Airgain 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 Aviat Networks with a short position of Airgain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aviat Networks and Airgain.
Diversification Opportunities for Aviat Networks and Airgain
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aviat and Airgain is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Aviat Networks and Airgain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airgain and Aviat Networks 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 Aviat Networks are associated (or correlated) with Airgain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airgain has no effect on the direction of Aviat Networks i.e., Aviat Networks and Airgain go up and down completely randomly.
Pair Corralation between Aviat Networks and Airgain
Given the investment horizon of 90 days Aviat Networks is expected to under-perform the Airgain. But the stock apears to be less risky and, when comparing its historical volatility, Aviat Networks is 1.34 times less risky than Airgain. The stock trades about -0.03 of its potential returns per unit of risk. The Airgain is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 756.00 in Airgain on August 24, 2024 and sell it today you would earn a total of 139.00 from holding Airgain or generate 18.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aviat Networks vs. Airgain
Performance |
| Timeline |
| Aviat Networks |
| Airgain |
Aviat Networks and Airgain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aviat Networks and Airgain
The main advantage of trading using opposite Aviat Networks and Airgain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aviat Networks position performs unexpectedly, Airgain 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 Airgain will offset losses from the drop in Airgain's long position.| Aviat Networks vs. AudioCodes | Aviat Networks vs. Silicom | Aviat Networks vs. Akoustis Technologies | Aviat Networks vs. Gilat Satellite Networks |
| Airgain vs. Hewlett Packard Enterprise | Airgain vs. Juniper Networks | Airgain vs. Cisco Systems | Airgain vs. Viavi Solutions |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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