Correlation Between Frequency Electronics and Electronic Systems
Can any of the company-specific risk be diversified away by investing in both Frequency Electronics and Electronic Systems 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 Electronic Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Frequency Electronics and Electronic Systems Technology, you can compare the effects of market volatilities on Frequency Electronics and Electronic Systems 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 Electronic Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Frequency Electronics and Electronic Systems.
Diversification Opportunities for Frequency Electronics and Electronic Systems
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Frequency and Electronic is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Frequency Electronics and Electronic Systems Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electronic Systems 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 Electronic Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electronic Systems has no effect on the direction of Frequency Electronics i.e., Frequency Electronics and Electronic Systems go up and down completely randomly.
Pair Corralation between Frequency Electronics and Electronic Systems
Given the investment horizon of 90 days Frequency Electronics is expected to generate 0.35 times more return on investment than Electronic Systems. However, Frequency Electronics is 2.88 times less risky than Electronic Systems. It trades about -0.15 of its potential returns per unit of risk. Electronic Systems Technology is currently generating about -0.16 per unit of risk. If you would invest 1,850 in Frequency Electronics on November 3, 2024 and sell it today you would lose (177.00) from holding Frequency Electronics or give up 9.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Frequency Electronics vs. Electronic Systems Technology
Performance |
| Timeline |
| Frequency Electronics |
| Electronic Systems |
Frequency Electronics and Electronic Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Frequency Electronics and Electronic Systems
The main advantage of trading using opposite Frequency Electronics and Electronic Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Frequency Electronics position performs unexpectedly, Electronic Systems 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 Electronic Systems will offset losses from the drop in Electronic Systems' long position.| Frequency Electronics vs. BK Technologies | Frequency Electronics vs. Actelis Networks | Frequency Electronics vs. Lantronix | Frequency Electronics vs. KVH Industries |
| Electronic Systems vs. BeWhere Holdings | Electronic Systems vs. Frequency Electronics | Electronic Systems vs. Wialan Technologies | Electronic Systems vs. TPT Global Tech |
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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