Correlation Between Teledyne Technologies and Astrotech Corp

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

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

Diversification Opportunities for Teledyne Technologies and Astrotech Corp

-0.25

Correlation Coefficient

Teledyne Technologies  Astrotech Corp

Very good diversification

The 3 months correlation between Teledyne and Astrotech is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Teledyne Technologies Incorpor and Astrotech Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astrotech Corp and Teledyne Technologies 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 Teledyne Technologies Incorporated 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 Teledyne Technologies i.e., Teledyne Technologies and Astrotech Corp go up and down completely randomly.

Pair Corralation between Teledyne Technologies and Astrotech Corp

Considering the 90-day investment horizon Teledyne Technologies Incorporated is expected to generate 0.49 times more return on investment than Astrotech Corp. However, Teledyne Technologies Incorporated is 2.02 times less risky than Astrotech Corp. It trades about 0.08 of its potential returns per unit of risk. Astrotech Corp is currently generating about -0.02 per unit of risk. If you would invest  46,523  in Teledyne Technologies Incorporated on December 30, 2024 and sell it today you would earn a total of  3,029  from holding Teledyne Technologies Incorporated or generate 6.51% return on investment over 90 days.

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

Teledyne Technologies Incorpor  vs.  Astrotech Corp

Teledyne Technologies

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Teledyne Technologies Incorporated are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain fundamental indicators, Teledyne Technologies 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 Teledyne Technologies and Astrotech Corp

The main advantage of trading using opposite Teledyne Technologies and Astrotech Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teledyne Technologies 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 Teledyne Technologies Incorporated 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.

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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.