Correlation Between TESSCO Technologies and Lantronix

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

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

Diversification Opportunities for TESSCO Technologies and Lantronix

0.0

Correlation Coefficient

TESSCO Technologies  Lantronix

Pay attention - limited upside

The 3 months correlation between TESSCO and Lantronix is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding TESSCO Technologies Incorporat and Lantronix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lantronix and TESSCO 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 TESSCO Technologies Incorporated 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 TESSCO Technologies i.e., TESSCO Technologies and Lantronix go up and down completely randomly.

Pair Corralation between TESSCO Technologies and Lantronix

If you would invest (100.00) in TESSCO Technologies Incorporated on December 30, 2024 and sell it today you would earn a total of  100.00  from holding TESSCO Technologies Incorporated or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

TESSCO Technologies Incorporat  vs.  Lantronix

TESSCO Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days TESSCO Technologies Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, TESSCO Technologies is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private 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 TESSCO Technologies and Lantronix

The main advantage of trading using opposite TESSCO Technologies and Lantronix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TESSCO Technologies 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 TESSCO Technologies Incorporated 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.