Correlation Between Wireless Telecom and Ubiquiti Networks
Can any of the company-specific risk be diversified away by investing in both Wireless Telecom and Ubiquiti 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 Wireless Telecom and Ubiquiti Networks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wireless Telecom Group and Ubiquiti Networks, you can compare the effects of market volatilities on Wireless Telecom and Ubiquiti 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 Wireless Telecom with a short position of Ubiquiti Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wireless Telecom and Ubiquiti Networks.
Diversification Opportunities for Wireless Telecom and Ubiquiti Networks
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wireless and Ubiquiti is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Wireless Telecom Group and Ubiquiti Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ubiquiti Networks and Wireless Telecom 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 Wireless Telecom Group are associated (or correlated) with Ubiquiti Networks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ubiquiti Networks has no effect on the direction of Wireless Telecom i.e., Wireless Telecom and Ubiquiti Networks go up and down completely randomly.
Pair Corralation between Wireless Telecom and Ubiquiti Networks
Considering the 90-day investment horizon Wireless Telecom is expected to generate 5.15 times less return on investment than Ubiquiti Networks. But when comparing it to its historical volatility, Wireless Telecom Group is 7.46 times less risky than Ubiquiti Networks. It trades about 0.12 of its potential returns per unit of risk. Ubiquiti Networks is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 16,469 in Ubiquiti Networks on August 31, 2024 and sell it today you would earn a total of 18,180 from holding Ubiquiti Networks or generate 110.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 8.29% |
| Values | Daily Returns |
Wireless Telecom Group vs. Ubiquiti Networks
Performance |
| Timeline |
| Wireless Telecom |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Ubiquiti Networks |
Wireless Telecom and Ubiquiti Networks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wireless Telecom and Ubiquiti Networks
The main advantage of trading using opposite Wireless Telecom and Ubiquiti Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wireless Telecom position performs unexpectedly, Ubiquiti 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 Ubiquiti Networks will offset losses from the drop in Ubiquiti Networks' long position.| Wireless Telecom vs. Mobilicom Limited Warrants | Wireless Telecom vs. Siyata Mobile | Wireless Telecom vs. SatixFy Communications | Wireless Telecom vs. Actelis Networks |
| Ubiquiti Networks vs. Credo Technology Group | Ubiquiti Networks vs. Zebra Technologies | Ubiquiti Networks vs. Ciena Corp | Ubiquiti Networks vs. Clearfield |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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