Correlation Between Aviat Networks and EchoStar
Can any of the company-specific risk be diversified away by investing in both Aviat Networks and EchoStar 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 EchoStar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aviat Networks and EchoStar, you can compare the effects of market volatilities on Aviat Networks and EchoStar 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 EchoStar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aviat Networks and EchoStar.
Diversification Opportunities for Aviat Networks and EchoStar
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aviat and EchoStar is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Aviat Networks and EchoStar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EchoStar 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 EchoStar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EchoStar has no effect on the direction of Aviat Networks i.e., Aviat Networks and EchoStar go up and down completely randomly.
Pair Corralation between Aviat Networks and EchoStar
Given the investment horizon of 90 days Aviat Networks is expected to under-perform the EchoStar. In addition to that, Aviat Networks is 1.79 times more volatile than EchoStar. It trades about -0.09 of its total potential returns per unit of risk. EchoStar is currently generating about -0.01 per unit of volatility. If you would invest 2,528 in EchoStar on August 28, 2024 and sell it today you would lose (87.00) from holding EchoStar or give up 3.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aviat Networks vs. EchoStar
Performance |
| Timeline |
| Aviat Networks |
| EchoStar |
Aviat Networks and EchoStar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aviat Networks and EchoStar
The main advantage of trading using opposite Aviat Networks and EchoStar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aviat Networks position performs unexpectedly, EchoStar 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 EchoStar will offset losses from the drop in EchoStar's long position.| Aviat Networks vs. AudioCodes | Aviat Networks vs. Silicom | Aviat Networks vs. Akoustis Technologies | Aviat Networks vs. Gilat Satellite Networks |
| EchoStar vs. ADTRAN Inc | EchoStar vs. Mynaric AG ADR | EchoStar vs. KVH Industries | EchoStar vs. Telesat Corp |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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