Correlation Between Lantronix and Actelis Networks
Can any of the company-specific risk be diversified away by investing in both Lantronix and Actelis Networks 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 Lantronix and Actelis Networks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lantronix and Actelis Networks, you can compare the effects of market volatilities on Lantronix and Actelis Networks 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 Lantronix with a short position of Actelis Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lantronix and Actelis Networks.
Diversification Opportunities for Lantronix and Actelis Networks
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lantronix and Actelis is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Lantronix and Actelis Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Actelis Networks and Lantronix 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 Lantronix are associated (or correlated) with Actelis Networks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Actelis Networks has no effect on the direction of Lantronix i.e., Lantronix and Actelis Networks go up and down completely randomly.
Pair Corralation between Lantronix and Actelis Networks
Given the investment horizon of 90 days Lantronix is expected to under-perform the Actelis Networks. In addition to that, Lantronix is 2.29 times more volatile than Actelis Networks. It trades about -0.18 of its total potential returns per unit of risk. Actelis Networks is currently generating about -0.06 per unit of volatility. If you would invest 134.00 in Actelis Networks on August 27, 2024 and sell it today you would lose (6.00) from holding Actelis Networks or give up 4.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lantronix vs. Actelis Networks
Performance |
| Timeline |
| Lantronix |
| Actelis Networks |
Lantronix and Actelis Networks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lantronix and Actelis Networks
The main advantage of trading using opposite Lantronix and Actelis Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lantronix position performs unexpectedly, Actelis Networks 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 Actelis Networks will offset losses from the drop in Actelis Networks' long position.| Lantronix vs. LightPath Technologies | Lantronix vs. Luna Innovations Incorporated | Lantronix vs. Identiv | Lantronix vs. VOXX International |
| Actelis Networks vs. Plexus Corp | Actelis Networks vs. Jabil Circuit | Actelis Networks vs. Sanmina | Actelis Networks vs. Methode Electronics |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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