Correlation Between ClearOne and Frequency Electronics
Can any of the company-specific risk be diversified away by investing in both ClearOne and Frequency Electronics 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 ClearOne and Frequency Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ClearOne and Frequency Electronics, you can compare the effects of market volatilities on ClearOne and Frequency Electronics 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 ClearOne with a short position of Frequency Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of ClearOne and Frequency Electronics.
Diversification Opportunities for ClearOne and Frequency Electronics
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ClearOne and Frequency is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding ClearOne and Frequency Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frequency Electronics and ClearOne 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 ClearOne are associated (or correlated) with Frequency Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frequency Electronics has no effect on the direction of ClearOne i.e., ClearOne and Frequency Electronics go up and down completely randomly.
Pair Corralation between ClearOne and Frequency Electronics
Given the investment horizon of 90 days ClearOne is expected to under-perform the Frequency Electronics. In addition to that, ClearOne is 1.18 times more volatile than Frequency Electronics. It trades about -0.35 of its total potential returns per unit of risk. Frequency Electronics is currently generating about 0.06 per unit of volatility. If you would invest 1,699 in Frequency Electronics on November 18, 2024 and sell it today you would earn a total of 48.00 from holding Frequency Electronics or generate 2.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ClearOne vs. Frequency Electronics
Performance |
| Timeline |
| ClearOne |
| Frequency Electronics |
ClearOne and Frequency Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ClearOne and Frequency Electronics
The main advantage of trading using opposite ClearOne and Frequency Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ClearOne position performs unexpectedly, Frequency Electronics 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 Frequency Electronics will offset losses from the drop in Frequency Electronics' long position.| ClearOne vs. Actelis Networks | ClearOne vs. Siyata Mobile | ClearOne vs. SatixFy Communications | ClearOne vs. Mobilicom Limited American |
| Frequency Electronics vs. BK Technologies | Frequency Electronics vs. Actelis Networks | Frequency Electronics vs. Lantronix | Frequency Electronics vs. KVH Industries |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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