Correlation Between Baylin Technologies and Edgewater Wireless
Can any of the company-specific risk be diversified away by investing in both Baylin Technologies and Edgewater Wireless 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 Baylin Technologies and Edgewater Wireless into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baylin Technologies and Edgewater Wireless Systems, you can compare the effects of market volatilities on Baylin Technologies and Edgewater Wireless 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 Baylin Technologies with a short position of Edgewater Wireless. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baylin Technologies and Edgewater Wireless.
Diversification Opportunities for Baylin Technologies and Edgewater Wireless
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Baylin and Edgewater is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Baylin Technologies and Edgewater Wireless Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edgewater Wireless and Baylin Technologies 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 Baylin Technologies are associated (or correlated) with Edgewater Wireless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edgewater Wireless has no effect on the direction of Baylin Technologies i.e., Baylin Technologies and Edgewater Wireless go up and down completely randomly.
Pair Corralation between Baylin Technologies and Edgewater Wireless
Assuming the 90 days horizon Baylin Technologies is expected to generate 3.36 times less return on investment than Edgewater Wireless. But when comparing it to its historical volatility, Baylin Technologies is 4.91 times less risky than Edgewater Wireless. It trades about 0.14 of its potential returns per unit of risk. Edgewater Wireless Systems is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2.60 in Edgewater Wireless Systems on September 1, 2024 and sell it today you would earn a total of 0.28 from holding Edgewater Wireless Systems or generate 10.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baylin Technologies vs. Edgewater Wireless Systems
Performance |
| Timeline |
| Baylin Technologies |
| Edgewater Wireless |
Baylin Technologies and Edgewater Wireless Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baylin Technologies and Edgewater Wireless
The main advantage of trading using opposite Baylin Technologies and Edgewater Wireless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baylin Technologies position performs unexpectedly, Edgewater Wireless 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 Edgewater Wireless will offset losses from the drop in Edgewater Wireless' long position.| Baylin Technologies vs. Metalert | Baylin Technologies vs. Viavi Solutions | Baylin Technologies vs. SatixFy Communications | Baylin Technologies vs. BK Technologies |
| Edgewater Wireless vs. Airgain | Edgewater Wireless vs. TPT Global Tech | Edgewater Wireless vs. Viavi Solutions | Edgewater Wireless vs. CommScope Holding Co |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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