Correlation Between Frequency Electronics and Rekor Systems

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

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

Diversification Opportunities for Frequency Electronics and Rekor Systems

-0.3

Correlation Coefficient

Frequency Electronics  Rekor Systems

Very good diversification

The 3 months correlation between Frequency and Rekor is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Frequency Electronics and Rekor Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rekor Systems and Frequency Electronics 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 Frequency Electronics are associated (or correlated) with Rekor Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rekor Systems has no effect on the direction of Frequency Electronics i.e., Frequency Electronics and Rekor Systems go up and down completely randomly.

Pair Corralation between Frequency Electronics and Rekor Systems

Given the investment horizon of 90 days Frequency Electronics is expected to generate 0.95 times more return on investment than Rekor Systems. However, Frequency Electronics is 1.05 times less risky than Rekor Systems. It trades about 0.1 of its potential returns per unit of risk. Rekor Systems is currently generating about -0.03 per unit of risk. If you would invest  3,827  in Frequency Electronics on October 6, 2025 and sell it today you would earn a total of  1,228  from holding Frequency Electronics or generate 32.09% return on investment over 90 days.

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

Frequency Electronics  vs.  Rekor Systems

Frequency Electronics

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Frequency Electronics are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating forward indicators, Frequency Electronics displayed solid returns over the last few months and may actually be approaching a breakup point.

Rekor Systems

Risk-Adjusted Performance

Weakest

Over the last 90 days Rekor Systems has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's forward-looking signals remain relatively invariable which may send shares a bit higher in February 2026. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Frequency Electronics and Rekor Systems

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

The idea behind Frequency Electronics and Rekor Systems 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.