Correlation Between Aviat Networks and Rimini Street
Can any of the company-specific risk be diversified away by investing in both Aviat Networks and Rimini Street 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 Rimini Street into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aviat Networks and Rimini Street, you can compare the effects of market volatilities on Aviat Networks and Rimini Street 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 Rimini Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aviat Networks and Rimini Street.
Diversification Opportunities for Aviat Networks and Rimini Street
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aviat and Rimini is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Aviat Networks and Rimini Street in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rimini Street 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 Rimini Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rimini Street has no effect on the direction of Aviat Networks i.e., Aviat Networks and Rimini Street go up and down completely randomly.
Pair Corralation between Aviat Networks and Rimini Street
Given the investment horizon of 90 days Aviat Networks is expected to under-perform the Rimini Street. In addition to that, Aviat Networks is 2.12 times more volatile than Rimini Street. It trades about -0.08 of its total potential returns per unit of risk. Rimini Street is currently generating about 0.08 per unit of volatility. If you would invest 187.00 in Rimini Street on August 28, 2024 and sell it today you would earn a total of 18.00 from holding Rimini Street or generate 9.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aviat Networks vs. Rimini Street
Performance |
| Timeline |
| Aviat Networks |
| Rimini Street |
Aviat Networks and Rimini Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aviat Networks and Rimini Street
The main advantage of trading using opposite Aviat Networks and Rimini Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aviat Networks position performs unexpectedly, Rimini Street 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 Rimini Street will offset losses from the drop in Rimini Street's long position.| Aviat Networks vs. AudioCodes | Aviat Networks vs. Silicom | Aviat Networks vs. Akoustis Technologies | Aviat Networks vs. Gilat Satellite Networks |
| Rimini Street vs. Issuer Direct Corp | Rimini Street vs. Cambium Networks Corp | Rimini Street vs. OneSpan | Rimini Street vs. Kiniksa Pharmaceuticals |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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