Correlation Between AstroNova and Lantronix

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

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

Diversification Opportunities for AstroNova and Lantronix

0.78

Correlation Coefficient

AstroNova  Lantronix

Poor diversification

The 3 months correlation between AstroNova and Lantronix is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding AstroNova and Lantronix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lantronix and AstroNova 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 AstroNova 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 AstroNova i.e., AstroNova and Lantronix go up and down completely randomly.

Pair Corralation between AstroNova and Lantronix

Given the investment horizon of 90 days AstroNova is expected to generate 1.13 times less return on investment than Lantronix. But when comparing it to its historical volatility, AstroNova is 1.02 times less risky than Lantronix. It trades about 0.13 of its potential returns per unit of risk. Lantronix is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  221.00  in Lantronix on May 5, 2025 and sell it today you would earn a total of  73.00  from holding Lantronix or generate 33.03% return on investment over 90 days.

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

AstroNova  vs.  Lantronix

AstroNova

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AstroNova are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, AstroNova unveiled solid returns over the last few months and may actually be approaching a breakup point.

Lantronix

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lantronix are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Lantronix showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AstroNova and Lantronix

The main advantage of trading using opposite AstroNova and Lantronix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AstroNova 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 AstroNova 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.