Correlation Between NYSE Composite and Aviat Networks
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Aviat 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 NYSE Composite and Aviat Networks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Aviat Networks, you can compare the effects of market volatilities on NYSE Composite and Aviat 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 NYSE Composite with a short position of Aviat Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Aviat Networks.
Diversification Opportunities for NYSE Composite and Aviat Networks
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NYSE and Aviat is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Aviat Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aviat Networks and NYSE Composite 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 NYSE Composite are associated (or correlated) with Aviat Networks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aviat Networks has no effect on the direction of NYSE Composite i.e., NYSE Composite and Aviat Networks go up and down completely randomly.
Pair Corralation between NYSE Composite and Aviat Networks
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.18 times more return on investment than Aviat Networks. However, NYSE Composite is 5.61 times less risky than Aviat Networks. It trades about 0.14 of its potential returns per unit of risk. Aviat Networks is currently generating about -0.06 per unit of risk. If you would invest 1,592,915 in NYSE Composite on August 24, 2024 and sell it today you would earn a total of 403,915 from holding NYSE Composite or generate 25.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Aviat Networks
Performance |
| Timeline |
NYSE Composite and Aviat Networks Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Aviat Networks
Pair trading matchups for Aviat Networks
Pair Trading with NYSE Composite and Aviat Networks
The main advantage of trading using opposite NYSE Composite and Aviat Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Aviat 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 Aviat Networks will offset losses from the drop in Aviat Networks' long position.| NYSE Composite vs. Awilco Drilling PLC | NYSE Composite vs. AKITA Drilling | NYSE Composite vs. SunOpta | NYSE Composite vs. Delek Drilling |
| Aviat Networks vs. AudioCodes | Aviat Networks vs. Silicom | Aviat Networks vs. Akoustis Technologies | Aviat Networks vs. Gilat Satellite Networks |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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