Correlation Between ScanTech and Frequency Electronics

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

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

Diversification Opportunities for ScanTech and Frequency Electronics

-0.59

Correlation Coefficient

ScanTech  Frequency Electronics

Excellent diversification

The 3 months correlation between ScanTech and Frequency is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding ScanTech AI Systems and Frequency Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frequency Electronics and ScanTech 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 ScanTech AI Systems are associated (or correlated) with Frequency Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frequency Electronics has no effect on the direction of ScanTech i.e., ScanTech and Frequency Electronics go up and down completely randomly.

Pair Corralation between ScanTech and Frequency Electronics

Given the investment horizon of 90 days ScanTech AI Systems is expected to under-perform the Frequency Electronics. In addition to that, ScanTech is 2.58 times more volatile than Frequency Electronics. It trades about -0.06 of its total potential returns per unit of risk. Frequency Electronics is currently generating about 0.21 per unit of volatility. If you would invest  1,694  in Frequency Electronics on May 12, 2025 and sell it today you would earn a total of  1,259  from holding Frequency Electronics or generate 74.32% return on investment over 90 days.

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

ScanTech AI Systems  vs.  Frequency Electronics

ScanTech AI Systems

Risk-Adjusted Performance

Weakest

Over the last 90 days ScanTech AI Systems has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in September 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Frequency Electronics

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Frequency Electronics are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady forward indicators, Frequency Electronics displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ScanTech and Frequency Electronics

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

The idea behind ScanTech AI Systems and Frequency Electronics 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.