Correlation Between Cognex and Focus Universal
Can any of the company-specific risk be diversified away by investing in both Cognex 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 Cognex and Focus Universal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cognex and Focus Universal, you can compare the effects of market volatilities on Cognex 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 Cognex with a short position of Focus Universal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cognex and Focus Universal.
Diversification Opportunities for Cognex and Focus Universal
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cognex and Focus is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Cognex and Focus Universal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Focus Universal and Cognex 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 Cognex 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 Cognex i.e., Cognex and Focus Universal go up and down completely randomly.
Pair Corralation between Cognex and Focus Universal
Given the investment horizon of 90 days Cognex is expected to generate 0.62 times more return on investment than Focus Universal. However, Cognex is 1.61 times less risky than Focus Universal. It trades about 0.06 of its potential returns per unit of risk. Focus Universal is currently generating about -0.03 per unit of risk. If you would invest 3,914 in Cognex on August 28, 2024 and sell it today you would earn a total of 110.00 from holding Cognex or generate 2.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cognex vs. Focus Universal
Performance |
| Timeline |
| Cognex |
| Focus Universal |
Cognex and Focus Universal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cognex and Focus Universal
The main advantage of trading using opposite Cognex and Focus Universal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cognex 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.| Cognex vs. Vontier Corp | Cognex vs. Teledyne Technologies Incorporated | Cognex vs. ESCO Technologies | Cognex vs. MKS Instruments |
| Focus Universal vs. ESCO Technologies | Focus Universal vs. Genasys | Focus Universal vs. Cepton Inc | Focus Universal vs. Darkpulse |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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