Correlation Between Aviat Networks and Akoustis Technologies
Can any of the company-specific risk be diversified away by investing in both Aviat Networks and Akoustis Technologies 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 Akoustis Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aviat Networks and Akoustis Technologies, you can compare the effects of market volatilities on Aviat Networks and Akoustis Technologies 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 Akoustis Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aviat Networks and Akoustis Technologies.
Diversification Opportunities for Aviat Networks and Akoustis Technologies
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aviat and Akoustis is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Aviat Networks and Akoustis Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akoustis Technologies 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 Akoustis Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akoustis Technologies has no effect on the direction of Aviat Networks i.e., Aviat Networks and Akoustis Technologies go up and down completely randomly.
Pair Corralation between Aviat Networks and Akoustis Technologies
Given the investment horizon of 90 days Aviat Networks is expected to generate 0.35 times more return on investment than Akoustis Technologies. However, Aviat Networks is 2.89 times less risky than Akoustis Technologies. It trades about -0.02 of its potential returns per unit of risk. Akoustis Technologies is currently generating about -0.04 per unit of risk. If you would invest 3,094 in Aviat Networks on August 28, 2024 and sell it today you would lose (1,459) from holding Aviat Networks or give up 47.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aviat Networks vs. Akoustis Technologies
Performance |
| Timeline |
| Aviat Networks |
| Akoustis Technologies |
Aviat Networks and Akoustis Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aviat Networks and Akoustis Technologies
The main advantage of trading using opposite Aviat Networks and Akoustis Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aviat Networks position performs unexpectedly, Akoustis Technologies 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 Akoustis Technologies will offset losses from the drop in Akoustis Technologies' long position.| Aviat Networks vs. AudioCodes | Aviat Networks vs. Silicom | Aviat Networks vs. Akoustis Technologies | Aviat Networks vs. Gilat Satellite Networks |
| Akoustis Technologies vs. Aviat Networks | Akoustis Technologies vs. AudioCodes | Akoustis Technologies vs. Silicom | Akoustis Technologies vs. Gilat Satellite Networks |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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