Correlation Between CommScope Holding and Aviat Networks
Can any of the company-specific risk be diversified away by investing in both CommScope Holding 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 CommScope Holding and Aviat Networks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CommScope Holding Co and Aviat Networks, you can compare the effects of market volatilities on CommScope Holding 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 CommScope Holding with a short position of Aviat Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of CommScope Holding and Aviat Networks.
Diversification Opportunities for CommScope Holding and Aviat Networks
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between CommScope and Aviat is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding CommScope Holding Co and Aviat Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aviat Networks and CommScope Holding 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 CommScope Holding Co 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 CommScope Holding i.e., CommScope Holding and Aviat Networks go up and down completely randomly.
Pair Corralation between CommScope Holding and Aviat Networks
Given the investment horizon of 90 days CommScope Holding Co is expected to generate 1.82 times more return on investment than Aviat Networks. However, CommScope Holding is 1.82 times more volatile than Aviat Networks. It trades about 0.02 of its potential returns per unit of risk. Aviat Networks is currently generating about -0.02 per unit of risk. If you would invest 481.00 in CommScope Holding Co on January 7, 2025 and sell it today you would lose (119.00) from holding CommScope Holding Co or give up 24.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CommScope Holding Co vs. Aviat Networks
Performance |
| Timeline |
| CommScope Holding |
| Aviat Networks |
CommScope Holding and Aviat Networks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CommScope Holding and Aviat Networks
The main advantage of trading using opposite CommScope Holding and Aviat Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CommScope Holding 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.| CommScope Holding vs. Harmonic | ||
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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