Correlation Between Edgewater Wireless and Baylin Technologies
Can any of the company-specific risk be diversified away by investing in both Edgewater Wireless and Baylin Technologies 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 Edgewater Wireless and Baylin Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Edgewater Wireless Systems and Baylin Technologies, you can compare the effects of market volatilities on Edgewater Wireless and Baylin Technologies 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 Edgewater Wireless with a short position of Baylin Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edgewater Wireless and Baylin Technologies.
Diversification Opportunities for Edgewater Wireless and Baylin Technologies
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Edgewater and Baylin is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Edgewater Wireless Systems and Baylin Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baylin Technologies and Edgewater Wireless 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 Edgewater Wireless Systems are associated (or correlated) with Baylin Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baylin Technologies has no effect on the direction of Edgewater Wireless i.e., Edgewater Wireless and Baylin Technologies go up and down completely randomly.
Pair Corralation between Edgewater Wireless and Baylin Technologies
Assuming the 90 days horizon Edgewater Wireless is expected to generate 1.55 times less return on investment than Baylin Technologies. In addition to that, Edgewater Wireless is 1.66 times more volatile than Baylin Technologies. It trades about 0.04 of its total potential returns per unit of risk. Baylin Technologies is currently generating about 0.1 per unit of volatility. If you would invest 20.00 in Baylin Technologies on September 3, 2024 and sell it today you would earn a total of 16.00 from holding Baylin Technologies or generate 80.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Edgewater Wireless Systems vs. Baylin Technologies
Performance |
| Timeline |
| Edgewater Wireless |
| Baylin Technologies |
Edgewater Wireless and Baylin Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edgewater Wireless and Baylin Technologies
The main advantage of trading using opposite Edgewater Wireless and Baylin Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edgewater Wireless position performs unexpectedly, Baylin Technologies 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 Baylin Technologies will offset losses from the drop in Baylin Technologies' long position.| Edgewater Wireless vs. Airgain | Edgewater Wireless vs. TPT Global Tech | Edgewater Wireless vs. Viavi Solutions | Edgewater Wireless vs. CommScope Holding Co |
| Baylin Technologies vs. Metalert | Baylin Technologies vs. Viavi Solutions | Baylin Technologies vs. SatixFy Communications | Baylin Technologies vs. BK Technologies |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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