Correlation Between FocalTech Systems and Brighten Optix
Can any of the company-specific risk be diversified away by investing in both FocalTech Systems and Brighten Optix 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 FocalTech Systems and Brighten Optix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FocalTech Systems Co and Brighten Optix, you can compare the effects of market volatilities on FocalTech Systems and Brighten Optix 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 FocalTech Systems with a short position of Brighten Optix. Check out your portfolio center. Please also check ongoing floating volatility patterns of FocalTech Systems and Brighten Optix.
Diversification Opportunities for FocalTech Systems and Brighten Optix
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between FocalTech and Brighten is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding FocalTech Systems Co and Brighten Optix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brighten Optix and FocalTech Systems 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 FocalTech Systems Co are associated (or correlated) with Brighten Optix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brighten Optix has no effect on the direction of FocalTech Systems i.e., FocalTech Systems and Brighten Optix go up and down completely randomly.
Pair Corralation between FocalTech Systems and Brighten Optix
Assuming the 90 days trading horizon FocalTech Systems Co is expected to generate 1.74 times more return on investment than Brighten Optix. However, FocalTech Systems is 1.74 times more volatile than Brighten Optix. It trades about 0.16 of its potential returns per unit of risk. Brighten Optix is currently generating about -0.17 per unit of risk. If you would invest 8,290 in FocalTech Systems Co on September 4, 2024 and sell it today you would earn a total of 540.00 from holding FocalTech Systems Co or generate 6.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FocalTech Systems Co vs. Brighten Optix
Performance |
| Timeline |
| FocalTech Systems |
| Brighten Optix |
FocalTech Systems and Brighten Optix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FocalTech Systems and Brighten Optix
The main advantage of trading using opposite FocalTech Systems and Brighten Optix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FocalTech Systems position performs unexpectedly, Brighten Optix 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 Brighten Optix will offset losses from the drop in Brighten Optix's long position.| FocalTech Systems vs. Taiwan Semiconductor Manufacturing | FocalTech Systems vs. Yang Ming Marine | FocalTech Systems vs. AU Optronics | FocalTech Systems vs. Innolux Corp |
| Brighten Optix vs. Arbor Technology | Brighten Optix vs. RiTdisplay Corp | Brighten Optix vs. Compal Broadband Networks | Brighten Optix vs. Univacco Technology |
Check out your portfolio center.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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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