Correlation Between Aviat Networks and Airgain

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

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

Diversification Opportunities for Aviat Networks and Airgain

-0.58

Correlation Coefficient

Aviat Networks  Airgain

Excellent diversification

The 3 months correlation between Aviat and Airgain is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Aviat Networks and Airgain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airgain and Aviat Networks 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 Aviat Networks are associated (or correlated) with Airgain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airgain has no effect on the direction of Aviat Networks i.e., Aviat Networks and Airgain go up and down completely randomly.

Pair Corralation between Aviat Networks and Airgain

Given the investment horizon of 90 days Aviat Networks is expected to generate 1.19 times more return on investment than Airgain. However, Aviat Networks is 1.19 times more volatile than Airgain. It trades about 0.13 of its potential returns per unit of risk. Airgain is currently generating about -0.12 per unit of risk. If you would invest  1,583  in Aviat Networks on November 28, 2024 and sell it today you would earn a total of  550.00  from holding Aviat Networks or generate 34.74% return on investment over 90 days.

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

Aviat Networks  vs.  Airgain

Aviat Networks

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aviat Networks are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Aviat Networks showed solid returns over the last few months and may actually be approaching a breakup point.

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 March 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Aviat Networks and Airgain

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

The idea behind Aviat Networks and Airgain 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.