Correlation Between SatixFy Communications and Lantronix

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

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

Diversification Opportunities for SatixFy Communications and Lantronix

0.47

Correlation Coefficient

SatixFy Communications  Lantronix

Very weak diversification

The 3 months correlation between SatixFy and Lantronix is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding SatixFy Communications and Lantronix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lantronix and SatixFy 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 SatixFy Communications are associated (or correlated) with Lantronix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lantronix has no effect on the direction of SatixFy Communications i.e., SatixFy Communications and Lantronix go up and down completely randomly.

Pair Corralation between SatixFy Communications and Lantronix

Given the investment horizon of 90 days SatixFy Communications is expected to generate 1.81 times more return on investment than Lantronix. However, SatixFy Communications is 1.81 times more volatile than Lantronix. It trades about -0.04 of its potential returns per unit of risk. Lantronix is currently generating about -0.14 per unit of risk. If you would invest  200.00  in SatixFy Communications on December 30, 2024 and sell it today you would lose (72.00) from holding SatixFy Communications or give up 36.0% of portfolio value over 90 days.

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

SatixFy Communications  vs.  Lantronix

SatixFy Communications

Risk-Adjusted Performance

Very Weak

Over the last 90 days SatixFy Communications 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 fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Lantronix

Risk-Adjusted Performance

Very Weak

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

Pair Trading with SatixFy Communications and Lantronix

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

The idea behind SatixFy Communications and Lantronix 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.