Correlation Between Astrotech Corp and Energous

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

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

Diversification Opportunities for Astrotech Corp and Energous

0.78

Correlation Coefficient

Astrotech Corp  Energous

Poor diversification

The 3 months correlation between Astrotech and Energous is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Astrotech Corp and Energous in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energous and Astrotech 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 Astrotech Corp are associated (or correlated) with Energous. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energous has no effect on the direction of Astrotech Corp i.e., Astrotech Corp and Energous go up and down completely randomly.

Pair Corralation between Astrotech Corp and Energous

Given the investment horizon of 90 days Astrotech Corp is expected to generate 0.89 times more return on investment than Energous. However, Astrotech Corp is 1.13 times less risky than Energous. It trades about -0.15 of its potential returns per unit of risk. Energous is currently generating about -0.17 per unit of risk. If you would invest  1,059  in Astrotech Corp on September 3, 2024 and sell it today you would lose (349.00) from holding Astrotech Corp or give up 32.96% of portfolio value over 90 days.

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

Astrotech Corp  vs.  Energous

Astrotech Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Astrotech Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Energous

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Energous has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Astrotech Corp and Energous

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

The idea behind Astrotech Corp and Energous 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.