Correlation Between Deswell Industries and Satellogic Warrant
Can any of the company-specific risk be diversified away by investing in both Deswell Industries and Satellogic Warrant 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 Deswell Industries and Satellogic Warrant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deswell Industries and Satellogic Warrant, you can compare the effects of market volatilities on Deswell Industries and Satellogic Warrant 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 Deswell Industries with a short position of Satellogic Warrant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deswell Industries and Satellogic Warrant.
Diversification Opportunities for Deswell Industries and Satellogic Warrant
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Deswell and Satellogic is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Deswell Industries and Satellogic Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Satellogic Warrant and Deswell Industries 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 Deswell Industries are associated (or correlated) with Satellogic Warrant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Satellogic Warrant has no effect on the direction of Deswell Industries i.e., Deswell Industries and Satellogic Warrant go up and down completely randomly.
Pair Corralation between Deswell Industries and Satellogic Warrant
Given the investment horizon of 90 days Deswell Industries is expected to generate 5355.21 times less return on investment than Satellogic Warrant. But when comparing it to its historical volatility, Deswell Industries is 100.23 times less risky than Satellogic Warrant. It trades about 0.0 of its potential returns per unit of risk. Satellogic Warrant is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 12.00 in Satellogic Warrant on October 20, 2024 and sell it today you would earn a total of 28.00 from holding Satellogic Warrant or generate 233.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 52.42% |
| Values | Daily Returns |
Deswell Industries vs. Satellogic Warrant
Performance |
| Timeline |
| Deswell Industries |
| Satellogic Warrant |
Deswell Industries and Satellogic Warrant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deswell Industries and Satellogic Warrant
The main advantage of trading using opposite Deswell Industries and Satellogic Warrant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deswell Industries position performs unexpectedly, Satellogic Warrant 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 Satellogic Warrant will offset losses from the drop in Satellogic Warrant's long position.| Deswell Industries vs. Ieh Corp | Deswell Industries vs. LGL Group | Deswell Industries vs. SigmaTron International | Deswell Industries vs. Daktronics |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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