Correlation Between Cognex and Hexagon AB
Can any of the company-specific risk be diversified away by investing in both Cognex and Hexagon AB 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 Hexagon AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cognex and Hexagon AB, you can compare the effects of market volatilities on Cognex and Hexagon AB 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 Hexagon AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cognex and Hexagon AB.
Diversification Opportunities for Cognex and Hexagon AB
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cognex and Hexagon is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Cognex and Hexagon AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hexagon AB 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 Hexagon AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hexagon AB has no effect on the direction of Cognex i.e., Cognex and Hexagon AB go up and down completely randomly.
Pair Corralation between Cognex and Hexagon AB
Given the investment horizon of 90 days Cognex is expected to generate 0.74 times more return on investment than Hexagon AB. However, Cognex is 1.36 times less risky than Hexagon AB. It trades about 0.06 of its potential returns per unit of risk. Hexagon AB is currently generating about -0.19 per unit of risk. If you would invest 3,914 in Cognex on August 29, 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. Hexagon AB
Performance |
| Timeline |
| Cognex |
| Hexagon AB |
Cognex and Hexagon AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cognex and Hexagon AB
The main advantage of trading using opposite Cognex and Hexagon AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cognex position performs unexpectedly, Hexagon AB 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 Hexagon AB will offset losses from the drop in Hexagon AB's long position.| Cognex vs. Vontier Corp | Cognex vs. Teledyne Technologies Incorporated | Cognex vs. ESCO Technologies | Cognex vs. MKS Instruments |
| Hexagon AB vs. Garmin | Hexagon AB vs. Keysight Technologies | Hexagon AB vs. Fortive Corp | Hexagon AB vs. Teledyne Technologies Incorporated |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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