Correlation Between Aviat Networks and Electronic Systems
Can any of the company-specific risk be diversified away by investing in both Aviat Networks and Electronic Systems 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 Electronic Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aviat Networks and Electronic Systems Technology, you can compare the effects of market volatilities on Aviat Networks and Electronic Systems 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 Electronic Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aviat Networks and Electronic Systems.
Diversification Opportunities for Aviat Networks and Electronic Systems
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aviat and Electronic is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Aviat Networks and Electronic Systems Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electronic Systems 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 Electronic Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electronic Systems has no effect on the direction of Aviat Networks i.e., Aviat Networks and Electronic Systems go up and down completely randomly.
Pair Corralation between Aviat Networks and Electronic Systems
Given the investment horizon of 90 days Aviat Networks is expected to generate 0.51 times more return on investment than Electronic Systems. However, Aviat Networks is 1.97 times less risky than Electronic Systems. It trades about -0.04 of its potential returns per unit of risk. Electronic Systems Technology is currently generating about -0.04 per unit of risk. If you would invest 3,310 in Aviat Networks on November 4, 2024 and sell it today you would lose (1,405) from holding Aviat Networks or give up 42.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aviat Networks vs. Electronic Systems Technology
Performance |
| Timeline |
| Aviat Networks |
| Electronic Systems |
Aviat Networks and Electronic Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aviat Networks and Electronic Systems
The main advantage of trading using opposite Aviat Networks and Electronic Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aviat Networks position performs unexpectedly, Electronic Systems 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 Electronic Systems will offset losses from the drop in Electronic Systems' long position.| Aviat Networks vs. AudioCodes | Aviat Networks vs. Silicom | Aviat Networks vs. Gilat Satellite Networks | Aviat Networks vs. Mynaric AG ADR |
| Electronic Systems vs. BeWhere Holdings | Electronic Systems vs. Frequency Electronics | Electronic Systems vs. Wialan Technologies | Electronic Systems vs. TPT Global Tech |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Stocks Directory Find actively traded stocks across global markets |