Correlation Between Altigen Communications and Aware

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

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

Diversification Opportunities for Altigen Communications and Aware

0.0

Correlation Coefficient

Altigen Communications  Aware

Pay attention - limited upside

The 3 months correlation between Altigen and Aware is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Altigen Communications and Aware Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aware Inc and Altigen Communications 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 Altigen Communications are associated (or correlated) with Aware. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aware Inc has no effect on the direction of Altigen Communications i.e., Altigen Communications and Aware go up and down completely randomly.

Pair Corralation between Altigen Communications and Aware

Given the investment horizon of 90 days Altigen Communications is expected to under-perform the Aware. In addition to that, Altigen Communications is 1.75 times more volatile than Aware Inc. It trades about -0.16 of its total potential returns per unit of risk. Aware Inc is currently generating about 0.02 per unit of volatility. If you would invest  167.00  in Aware Inc on October 12, 2024 and sell it today you would lose (10.00) from holding Aware Inc or give up 5.99% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	3.03%
Values	Daily Returns

Altigen Communications  vs.  Aware Inc

Altigen Communications

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Altigen Communications has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Altigen Communications is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Aware Inc

Risk-Adjusted Performance

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Very Weak

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

Pair Trading with Altigen Communications and Aware

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

The idea behind Altigen Communications and Aware Inc 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.