Correlation Between Optical Cable and Actelis Networks
Can any of the company-specific risk be diversified away by investing in both Optical Cable 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 Optical Cable and Actelis Networks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Optical Cable and Actelis Networks, you can compare the effects of market volatilities on Optical Cable 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 Optical Cable with a short position of Actelis Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Optical Cable and Actelis Networks.
Diversification Opportunities for Optical Cable and Actelis Networks
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Optical and Actelis is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Optical Cable and Actelis Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Actelis Networks and Optical Cable 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 Optical Cable 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 Optical Cable i.e., Optical Cable and Actelis Networks go up and down completely randomly.
Pair Corralation between Optical Cable and Actelis Networks
Considering the 90-day investment horizon Optical Cable is expected to generate 1.54 times more return on investment than Actelis Networks. However, Optical Cable is 1.54 times more volatile than Actelis Networks. It trades about 0.19 of its potential returns per unit of risk. Actelis Networks is currently generating about -0.26 per unit of risk. If you would invest 435.00 in Optical Cable on November 2, 2024 and sell it today you would earn a total of 112.00 from holding Optical Cable or generate 25.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Optical Cable vs. Actelis Networks
Performance |
| Timeline |
| Optical Cable |
| Actelis Networks |
Optical Cable and Actelis Networks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Optical Cable and Actelis Networks
The main advantage of trading using opposite Optical Cable and Actelis Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Optical Cable 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.| Optical Cable vs. Comtech Telecommunications Corp | Optical Cable vs. Silicom | Optical Cable vs. Knowles Cor | Optical Cable vs. Mynaric AG ADR |
| Actelis Networks vs. ClearOne | Actelis Networks vs. Siyata Mobile | Actelis Networks vs. SatixFy Communications | Actelis Networks vs. Optical Cable |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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