Correlation Between Edgewater Wireless and Moving IMage
Can any of the company-specific risk be diversified away by investing in both Edgewater Wireless and Moving IMage 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 Moving IMage 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 Moving iMage Technologies, you can compare the effects of market volatilities on Edgewater Wireless and Moving IMage 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 Moving IMage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edgewater Wireless and Moving IMage.
Diversification Opportunities for Edgewater Wireless and Moving IMage
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Edgewater and Moving is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Edgewater Wireless Systems and Moving iMage Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moving iMage 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 Moving IMage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moving iMage Technologies has no effect on the direction of Edgewater Wireless i.e., Edgewater Wireless and Moving IMage go up and down completely randomly.
Pair Corralation between Edgewater Wireless and Moving IMage
Assuming the 90 days horizon Edgewater Wireless Systems is expected to generate 2.89 times more return on investment than Moving IMage. However, Edgewater Wireless is 2.89 times more volatile than Moving iMage Technologies. It trades about 0.02 of its potential returns per unit of risk. Moving iMage Technologies is currently generating about -0.08 per unit of risk. If you would invest 3.23 in Edgewater Wireless Systems on August 28, 2024 and sell it today you would lose (0.19) from holding Edgewater Wireless Systems or give up 5.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Edgewater Wireless Systems vs. Moving iMage Technologies
Performance |
| Timeline |
| Edgewater Wireless |
| Moving iMage Technologies |
Edgewater Wireless and Moving IMage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edgewater Wireless and Moving IMage
The main advantage of trading using opposite Edgewater Wireless and Moving IMage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edgewater Wireless position performs unexpectedly, Moving IMage 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 Moving IMage will offset losses from the drop in Moving IMage's long position.| Edgewater Wireless vs. Airgain | Edgewater Wireless vs. TPT Global Tech | Edgewater Wireless vs. Viavi Solutions | Edgewater Wireless vs. CommScope Holding Co |
| Moving IMage vs. Franklin Wireless Corp | Moving IMage vs. Wialan Technologies | Moving IMage vs. TPT Global Tech | Moving IMage vs. Comtech Telecommunications Corp |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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