Correlation Between Ubiquiti Networks and Frequency Electronics
Can any of the company-specific risk be diversified away by investing in both Ubiquiti Networks and Frequency Electronics 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 Ubiquiti Networks and Frequency Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ubiquiti Networks and Frequency Electronics, you can compare the effects of market volatilities on Ubiquiti Networks and Frequency Electronics 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 Ubiquiti Networks with a short position of Frequency Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ubiquiti Networks and Frequency Electronics.
Diversification Opportunities for Ubiquiti Networks and Frequency Electronics
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ubiquiti and Frequency is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Ubiquiti Networks and Frequency Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frequency Electronics and Ubiquiti Networks 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 Ubiquiti Networks are associated (or correlated) with Frequency Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frequency Electronics has no effect on the direction of Ubiquiti Networks i.e., Ubiquiti Networks and Frequency Electronics go up and down completely randomly.
Pair Corralation between Ubiquiti Networks and Frequency Electronics
Allowing for the 90-day total investment horizon Ubiquiti Networks is expected to generate 5.07 times more return on investment than Frequency Electronics. However, Ubiquiti Networks is 5.07 times more volatile than Frequency Electronics. It trades about 0.35 of its potential returns per unit of risk. Frequency Electronics is currently generating about 0.27 per unit of risk. If you would invest 25,815 in Ubiquiti Networks on August 27, 2024 and sell it today you would earn a total of 10,457 from holding Ubiquiti Networks or generate 40.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ubiquiti Networks vs. Frequency Electronics
Performance |
| Timeline |
| Ubiquiti Networks |
| Frequency Electronics |
Ubiquiti Networks and Frequency Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ubiquiti Networks and Frequency Electronics
The main advantage of trading using opposite Ubiquiti Networks and Frequency Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ubiquiti Networks position performs unexpectedly, Frequency Electronics 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 Frequency Electronics will offset losses from the drop in Frequency Electronics' long position.| Ubiquiti Networks vs. Ichor Holdings | Ubiquiti Networks vs. Fabrinet | Ubiquiti Networks vs. Hello Group | Ubiquiti Networks vs. Ultra Clean Holdings |
| Frequency Electronics vs. BK Technologies | Frequency Electronics vs. Actelis Networks | Frequency Electronics vs. Lantronix | Frequency Electronics vs. KVH Industries |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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