Correlation Between Aviat Networks and AmpliTech
Can any of the company-specific risk be diversified away by investing in both Aviat Networks and AmpliTech 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 AmpliTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aviat Networks and AmpliTech Group, you can compare the effects of market volatilities on Aviat Networks and AmpliTech 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 AmpliTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aviat Networks and AmpliTech.
Diversification Opportunities for Aviat Networks and AmpliTech
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aviat and AmpliTech is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Aviat Networks and AmpliTech Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AmpliTech Group 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 AmpliTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AmpliTech Group has no effect on the direction of Aviat Networks i.e., Aviat Networks and AmpliTech go up and down completely randomly.
Pair Corralation between Aviat Networks and AmpliTech
Given the investment horizon of 90 days Aviat Networks is expected to under-perform the AmpliTech. But the stock apears to be less risky and, when comparing its historical volatility, Aviat Networks is 6.32 times less risky than AmpliTech. The stock trades about -0.05 of its potential returns per unit of risk. The AmpliTech Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 24.00 in AmpliTech Group on September 1, 2024 and sell it today you would lose (20.81) from holding AmpliTech Group or give up 86.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aviat Networks vs. AmpliTech Group
Performance |
| Timeline |
| Aviat Networks |
| AmpliTech Group |
Aviat Networks and AmpliTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aviat Networks and AmpliTech
The main advantage of trading using opposite Aviat Networks and AmpliTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aviat Networks position performs unexpectedly, AmpliTech 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 AmpliTech will offset losses from the drop in AmpliTech's long position.| Aviat Networks vs. AudioCodes | Aviat Networks vs. Silicom | Aviat Networks vs. Akoustis Technologies | Aviat Networks vs. Gilat Satellite Networks |
| AmpliTech vs. Amplitech Group | AmpliTech vs. Advent Technologies Holdings | AmpliTech vs. Cyclo Therapeutics |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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