Correlation Between Telos Corp and Rekor Systems
Can any of the company-specific risk be diversified away by investing in both Telos Corp and Rekor Systems 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 Telos Corp and Rekor Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telos Corp and Rekor Systems, you can compare the effects of market volatilities on Telos Corp and Rekor Systems 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 Telos Corp with a short position of Rekor Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telos Corp and Rekor Systems.
Diversification Opportunities for Telos Corp and Rekor Systems
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Telos and Rekor is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Telos Corp and Rekor Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rekor Systems and Telos Corp 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 Telos Corp are associated (or correlated) with Rekor Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rekor Systems has no effect on the direction of Telos Corp i.e., Telos Corp and Rekor Systems go up and down completely randomly.
Pair Corralation between Telos Corp and Rekor Systems
Considering the 90-day investment horizon Telos Corp is expected to under-perform the Rekor Systems. But the stock apears to be less risky and, when comparing its historical volatility, Telos Corp is 1.1 times less risky than Rekor Systems. The stock trades about -0.06 of its potential returns per unit of risk. The Rekor Systems is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 106.00 in Rekor Systems on August 31, 2024 and sell it today you would lose (10.00) from holding Rekor Systems or give up 9.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telos Corp vs. Rekor Systems
Performance |
| Timeline |
| Telos Corp |
| Rekor Systems |
Telos Corp and Rekor Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telos Corp and Rekor Systems
The main advantage of trading using opposite Telos Corp and Rekor Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telos Corp position performs unexpectedly, Rekor Systems 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 Rekor Systems will offset losses from the drop in Rekor Systems' long position.| Telos Corp vs. GigaCloud Technology Class | Telos Corp vs. Arqit Quantum | Telos Corp vs. Cemtrex | Telos Corp vs. Rapid7 Inc |
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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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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