Correlation Between TAT Technologies and Axilion Smart
Can any of the company-specific risk be diversified away by investing in both TAT Technologies and Axilion Smart 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 TAT Technologies and Axilion Smart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TAT Technologies and Axilion Smart Mobility, you can compare the effects of market volatilities on TAT Technologies and Axilion Smart 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 TAT Technologies with a short position of Axilion Smart. Check out your portfolio center. Please also check ongoing floating volatility patterns of TAT Technologies and Axilion Smart.
Diversification Opportunities for TAT Technologies and Axilion Smart
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between TAT and Axilion is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding TAT Technologies and Axilion Smart Mobility in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axilion Smart Mobility and TAT Technologies 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 TAT Technologies are associated (or correlated) with Axilion Smart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axilion Smart Mobility has no effect on the direction of TAT Technologies i.e., TAT Technologies and Axilion Smart go up and down completely randomly.
Pair Corralation between TAT Technologies and Axilion Smart
Assuming the 90 days trading horizon TAT Technologies is expected to generate 1.43 times more return on investment than Axilion Smart. However, TAT Technologies is 1.43 times more volatile than Axilion Smart Mobility. It trades about 0.22 of its potential returns per unit of risk. Axilion Smart Mobility is currently generating about -0.34 per unit of risk. If you would invest 699,100 in TAT Technologies on August 27, 2024 and sell it today you would earn a total of 101,400 from holding TAT Technologies or generate 14.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TAT Technologies vs. Axilion Smart Mobility
Performance |
| Timeline |
| TAT Technologies |
| Axilion Smart Mobility |
TAT Technologies and Axilion Smart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TAT Technologies and Axilion Smart
The main advantage of trading using opposite TAT Technologies and Axilion Smart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TAT Technologies position performs unexpectedly, Axilion Smart 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 Axilion Smart will offset losses from the drop in Axilion Smart's long position.| TAT Technologies vs. Orbit Technologies | TAT Technologies vs. Tower Semiconductor | TAT Technologies vs. Elron Electronic Industries | TAT Technologies vs. Elbit Systems |
| Axilion Smart vs. Oron Group Investments | Axilion Smart vs. Hiron Trade Investments Industrial | Axilion Smart vs. Arad Investment Industrial | Axilion Smart vs. TAT Technologies |
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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