Correlation Between Airgain and AAC Technologies

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

By analyzing existing cross correlation between Airgain and AAC Technologies Holdings, you can compare the effects of market volatilities on Airgain and AAC Technologies 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 Airgain with a short position of AAC Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airgain and AAC Technologies.

Diversification Opportunities for Airgain and AAC Technologies

-0.45

Correlation Coefficient

Airgain  AAC Technologies

Very good diversification

The 3 months correlation between Airgain and AAC is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Airgain and AAC Technologies Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AAC Technologies Holdings and Airgain 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 Airgain are associated (or correlated) with AAC Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AAC Technologies Holdings has no effect on the direction of Airgain i.e., Airgain and AAC Technologies go up and down completely randomly.

Pair Corralation between Airgain and AAC Technologies

Given the investment horizon of 90 days Airgain is expected to under-perform the AAC Technologies. In addition to that, Airgain is 1.28 times more volatile than AAC Technologies Holdings. It trades about -0.17 of its total potential returns per unit of risk. AAC Technologies Holdings is currently generating about 0.12 per unit of volatility. If you would invest  463.00  in AAC Technologies Holdings on December 2, 2024 and sell it today you would earn a total of  104.00  from holding AAC Technologies Holdings or generate 22.46% return on investment over 90 days.

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

Airgain  vs.  AAC Technologies Holdings

Airgain

Risk-Adjusted Performance

Very Weak

Over the last 90 days Airgain has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

AAC Technologies Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AAC Technologies Holdings are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, AAC Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Airgain and AAC Technologies

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

The idea behind Airgain and AAC Technologies Holdings 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.