Correlation Between Worthington Steel and Aviat Networks

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

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

Diversification Opportunities for Worthington Steel and Aviat Networks

0.45

Correlation Coefficient

Worthington Steel  Aviat Networks

Very weak diversification

The 3 months correlation between Worthington and Aviat is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Worthington Steel and Aviat Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aviat Networks and Worthington Steel 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 Worthington Steel are associated (or correlated) with Aviat Networks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aviat Networks has no effect on the direction of Worthington Steel i.e., Worthington Steel and Aviat Networks go up and down completely randomly.

Pair Corralation between Worthington Steel and Aviat Networks

Allowing for the 90-day total investment horizon Worthington Steel is expected to generate 0.98 times more return on investment than Aviat Networks. However, Worthington Steel is 1.02 times less risky than Aviat Networks. It trades about -0.01 of its potential returns per unit of risk. Aviat Networks is currently generating about -0.03 per unit of risk. If you would invest  3,182  in Worthington Steel on July 2, 2025 and sell it today you would lose (136.00) from holding Worthington Steel or give up 4.27% of portfolio value over 90 days.

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

Worthington Steel  vs.  Aviat Networks

Worthington Steel

Risk-Adjusted Performance

Weakest

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

Aviat Networks

Risk-Adjusted Performance

Weakest

Over the last 90 days Aviat Networks has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Worthington Steel and Aviat Networks

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

The idea behind Worthington Steel and Aviat Networks 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.