Correlation Between Frequency Electronics and Data IO
Can any of the company-specific risk be diversified away by investing in both Frequency Electronics and Data IO 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 Frequency Electronics and Data IO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Frequency Electronics and Data IO, you can compare the effects of market volatilities on Frequency Electronics and Data IO 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 Frequency Electronics with a short position of Data IO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Frequency Electronics and Data IO.
Diversification Opportunities for Frequency Electronics and Data IO
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Frequency and Data is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Frequency Electronics and Data IO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Data IO and Frequency Electronics 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 Frequency Electronics are associated (or correlated) with Data IO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Data IO has no effect on the direction of Frequency Electronics i.e., Frequency Electronics and Data IO go up and down completely randomly.
Pair Corralation between Frequency Electronics and Data IO
Given the investment horizon of 90 days Frequency Electronics is expected to under-perform the Data IO. In addition to that, Frequency Electronics is 1.26 times more volatile than Data IO. It trades about -0.15 of its total potential returns per unit of risk. Data IO is currently generating about 0.23 per unit of volatility. If you would invest 276.00 in Data IO on November 3, 2024 and sell it today you would earn a total of 31.00 from holding Data IO or generate 11.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Frequency Electronics vs. Data IO
Performance |
| Timeline |
| Frequency Electronics |
| Data IO |
Frequency Electronics and Data IO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Frequency Electronics and Data IO
The main advantage of trading using opposite Frequency Electronics and Data IO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Frequency Electronics position performs unexpectedly, Data IO 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 Data IO will offset losses from the drop in Data IO's long position.| 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Transaction History View history of all your transactions and understand their impact on performance |