Correlation Between Bonso Electronics and Focus Universal
Can any of the company-specific risk be diversified away by investing in both Bonso Electronics and Focus Universal 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 Bonso Electronics and Focus Universal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bonso Electronics International and Focus Universal, you can compare the effects of market volatilities on Bonso Electronics and Focus Universal 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 Bonso Electronics with a short position of Focus Universal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bonso Electronics and Focus Universal.
Diversification Opportunities for Bonso Electronics and Focus Universal
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bonso and Focus is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Bonso Electronics Internationa and Focus Universal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Focus Universal and Bonso 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 Bonso Electronics International are associated (or correlated) with Focus Universal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Focus Universal has no effect on the direction of Bonso Electronics i.e., Bonso Electronics and Focus Universal go up and down completely randomly.
Pair Corralation between Bonso Electronics and Focus Universal
Given the investment horizon of 90 days Bonso Electronics International is expected to generate 3.13 times more return on investment than Focus Universal. However, Bonso Electronics is 3.13 times more volatile than Focus Universal. It trades about 0.07 of its potential returns per unit of risk. Focus Universal is currently generating about -0.04 per unit of risk. If you would invest 303.00 in Bonso Electronics International on September 1, 2024 and sell it today you would lose (44.00) from holding Bonso Electronics International or give up 14.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 8.06% |
| Values | Daily Returns |
Bonso Electronics Internationa vs. Focus Universal
Performance |
| Timeline |
| Bonso Electronics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Focus Universal |
Bonso Electronics and Focus Universal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bonso Electronics and Focus Universal
The main advantage of trading using opposite Bonso Electronics and Focus Universal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bonso Electronics position performs unexpectedly, Focus Universal 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 Focus Universal will offset losses from the drop in Focus Universal's long position.| Bonso Electronics vs. Cepton Inc | Bonso Electronics vs. SaverOne 2014 Ltd | Bonso Electronics vs. Genasys | Bonso Electronics vs. Kraken Robotics |
| Focus Universal vs. ESCO Technologies | Focus Universal vs. Genasys | Focus Universal vs. Cepton Inc | Focus Universal vs. Know Labs |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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