Correlation Between RoboGroup TEK and American Defense
Can any of the company-specific risk be diversified away by investing in both RoboGroup TEK and American Defense 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 RoboGroup TEK and American Defense into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RoboGroup TEK and American Defense Systems, you can compare the effects of market volatilities on RoboGroup TEK and American Defense 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 RoboGroup TEK with a short position of American Defense. Check out your portfolio center. Please also check ongoing floating volatility patterns of RoboGroup TEK and American Defense.
Diversification Opportunities for RoboGroup TEK and American Defense
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between RoboGroup and American is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding RoboGroup TEK and American Defense Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Defense Systems and RoboGroup TEK 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 RoboGroup TEK are associated (or correlated) with American Defense. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Defense Systems has no effect on the direction of RoboGroup TEK i.e., RoboGroup TEK and American Defense go up and down completely randomly.
Pair Corralation between RoboGroup TEK and American Defense
If you would invest 0.02 in American Defense Systems on August 31, 2024 and sell it today you would earn a total of 0.00 from holding American Defense Systems or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
RoboGroup TEK vs. American Defense Systems
Performance |
| Timeline |
| RoboGroup TEK |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| American Defense Systems |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
RoboGroup TEK and American Defense Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RoboGroup TEK and American Defense
The main advantage of trading using opposite RoboGroup TEK and American Defense positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RoboGroup TEK position performs unexpectedly, American Defense 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 American Defense will offset losses from the drop in American Defense's long position.| RoboGroup TEK vs. Garmin | RoboGroup TEK vs. Cognex | RoboGroup TEK vs. Spectris plc | RoboGroup TEK vs. Electro Sensors |
| American Defense vs. PME Inc | American Defense vs. Electro Optic Systems | American Defense vs. Astronics Corp Cl | American Defense vs. V2X Inc |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |