Correlation Between Tat Techno and Astrotech Corp

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

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

Diversification Opportunities for Tat Techno and Astrotech Corp

0.32

Correlation Coefficient

Tat Techno  Astrotech Corp

Weak diversification

The 3 months correlation between Tat and Astrotech is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Tat Techno and Astrotech Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astrotech Corp and Tat Techno 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 Tat Techno are associated (or correlated) with Astrotech Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astrotech Corp has no effect on the direction of Tat Techno i.e., Tat Techno and Astrotech Corp go up and down completely randomly.

Pair Corralation between Tat Techno and Astrotech Corp

Given the investment horizon of 90 days Tat Techno is expected to generate 1.29 times more return on investment than Astrotech Corp. However, Tat Techno is 1.29 times more volatile than Astrotech Corp. It trades about 0.05 of its potential returns per unit of risk. Astrotech Corp is currently generating about -0.02 per unit of risk. If you would invest  2,634  in Tat Techno on December 28, 2024 and sell it today you would earn a total of  186.00  from holding Tat Techno or generate 7.06% return on investment over 90 days.

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

Tat Techno  vs.  Astrotech Corp

Tat Techno

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Tat Techno are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Tat Techno may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Astrotech Corp

Risk-Adjusted Performance

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 rather sound basic indicators, Astrotech Corp is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Tat Techno and Astrotech Corp

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

The idea behind Tat Techno and Astrotech Corp 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.

Check out your portfolio center.

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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.