Correlation Between MAVEN WIRELESS and ARROW ELECTRONICS

Can any of the company-specific risk be diversified away by investing in both MAVEN WIRELESS and ARROW 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 MAVEN WIRELESS and ARROW ELECTRONICS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MAVEN WIRELESS SWEDEN and ARROW ELECTRONICS, you can compare the effects of market volatilities on MAVEN WIRELESS and ARROW 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 MAVEN WIRELESS with a short position of ARROW ELECTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAVEN WIRELESS and ARROW ELECTRONICS.

Diversification Opportunities for MAVEN WIRELESS and ARROW ELECTRONICS

0.55

Correlation Coefficient

MAVEN WIRELESS  ARROW ELECTRONICS

Very weak diversification

The 3 months correlation between MAVEN and ARROW is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding MAVEN WIRELESS SWEDEN and ARROW ELECTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARROW ELECTRONICS and MAVEN WIRELESS 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 MAVEN WIRELESS SWEDEN are associated (or correlated) with ARROW ELECTRONICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARROW ELECTRONICS has no effect on the direction of MAVEN WIRELESS i.e., MAVEN WIRELESS and ARROW ELECTRONICS go up and down completely randomly.

Pair Corralation between MAVEN WIRELESS and ARROW ELECTRONICS

Assuming the 90 days horizon MAVEN WIRELESS SWEDEN is expected to generate 1.23 times more return on investment than ARROW ELECTRONICS. However, MAVEN WIRELESS is 1.23 times more volatile than ARROW ELECTRONICS. It trades about -0.03 of its potential returns per unit of risk. ARROW ELECTRONICS is currently generating about -0.04 per unit of risk. If you would invest  97.00  in MAVEN WIRELESS SWEDEN on October 7, 2024 and sell it today you would lose (8.00) from holding MAVEN WIRELESS SWEDEN or give up 8.25% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

MAVEN WIRELESS SWEDEN  vs.  ARROW ELECTRONICS

MAVEN WIRELESS SWEDEN

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MAVEN WIRELESS SWEDEN has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

ARROW ELECTRONICS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ARROW ELECTRONICS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with MAVEN WIRELESS and ARROW ELECTRONICS

The main advantage of trading using opposite MAVEN WIRELESS and ARROW ELECTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAVEN WIRELESS position performs unexpectedly, ARROW 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 ARROW ELECTRONICS will offset losses from the drop in ARROW ELECTRONICS's long position.

The idea behind MAVEN WIRELESS SWEDEN and ARROW ELECTRONICS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.