Correlation Between Comtech Telecommunicatio and Aviat Networks
Can any of the company-specific risk be diversified away by investing in both Comtech Telecommunicatio and Aviat Networks 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 Comtech Telecommunicatio and Aviat Networks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Comtech Telecommunications Corp and Aviat Networks, you can compare the effects of market volatilities on Comtech Telecommunicatio and Aviat Networks 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 Comtech Telecommunicatio with a short position of Aviat Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comtech Telecommunicatio and Aviat Networks.
Diversification Opportunities for Comtech Telecommunicatio and Aviat Networks
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Comtech and Aviat is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Comtech Telecommunications Cor and Aviat Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aviat Networks and Comtech Telecommunicatio 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 Comtech Telecommunications Corp are associated (or correlated) with Aviat Networks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aviat Networks has no effect on the direction of Comtech Telecommunicatio i.e., Comtech Telecommunicatio and Aviat Networks go up and down completely randomly.
Pair Corralation between Comtech Telecommunicatio and Aviat Networks
Given the investment horizon of 90 days Comtech Telecommunications Corp is expected to generate 2.01 times more return on investment than Aviat Networks. However, Comtech Telecommunicatio is 2.01 times more volatile than Aviat Networks. It trades about -0.01 of its potential returns per unit of risk. Aviat Networks is currently generating about -0.03 per unit of risk. If you would invest 1,258 in Comtech Telecommunications Corp on August 24, 2024 and sell it today you would lose (942.00) from holding Comtech Telecommunications Corp or give up 74.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Comtech Telecommunications Cor vs. Aviat Networks
Performance |
| Timeline |
| Comtech Telecommunicatio |
| Aviat Networks |
Comtech Telecommunicatio and Aviat Networks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comtech Telecommunicatio and Aviat Networks
The main advantage of trading using opposite Comtech Telecommunicatio and Aviat Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comtech Telecommunicatio position performs unexpectedly, Aviat Networks 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 Aviat Networks will offset losses from the drop in Aviat Networks' long position.| Comtech Telecommunicatio vs. Frequency Electronics | Comtech Telecommunicatio vs. Actelis Networks | Comtech Telecommunicatio vs. Optical Cable | Comtech Telecommunicatio vs. Lantronix |
| Aviat Networks vs. Frequency Electronics | Aviat Networks vs. Actelis Networks | Aviat Networks vs. Optical Cable | Aviat Networks vs. Lantronix |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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