Correlation Between Tel Instrument and Passur Aerospace

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

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

Diversification Opportunities for Tel Instrument and Passur Aerospace

-0.66

Correlation Coefficient

Tel Instrument  Passur Aerospace

Excellent diversification

The 3 months correlation between Tel and Passur is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Tel Instrument Electronics Cor and Passur Aerospace in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Passur Aerospace and Tel Instrument 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 Tel Instrument Electronics Corp are associated (or correlated) with Passur Aerospace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Passur Aerospace has no effect on the direction of Tel Instrument i.e., Tel Instrument and Passur Aerospace go up and down completely randomly.

Pair Corralation between Tel Instrument and Passur Aerospace

If you would invest  1.50  in Passur Aerospace on September 14, 2024 and sell it today you would earn a total of  0.00  from holding Passur Aerospace or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	4.55%
Values	Daily Returns

Tel Instrument Electronics Cor  vs.  Passur Aerospace

Tel Instrument Elect

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tel Instrument Electronics Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Tel Instrument is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Passur Aerospace

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Passur Aerospace has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Passur Aerospace is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Tel Instrument and Passur Aerospace

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

The idea behind Tel Instrument Electronics Corp and Passur Aerospace 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.