Correlation Between Cognex and MKS Instruments
Can any of the company-specific risk be diversified away by investing in both Cognex and MKS Instruments 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 MKS Instruments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cognex and MKS Instruments, you can compare the effects of market volatilities on Cognex and MKS Instruments 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 MKS Instruments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cognex and MKS Instruments.
Diversification Opportunities for Cognex and MKS Instruments
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Cognex and MKS is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Cognex and MKS Instruments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MKS Instruments 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 MKS Instruments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MKS Instruments has no effect on the direction of Cognex i.e., Cognex and MKS Instruments go up and down completely randomly.
Pair Corralation between Cognex and MKS Instruments
Given the investment horizon of 90 days Cognex is expected to generate 1.43 times less return on investment than MKS Instruments. But when comparing it to its historical volatility, Cognex is 1.43 times less risky than MKS Instruments. It trades about 0.4 of its potential returns per unit of risk. MKS Instruments is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest 10,353 in MKS Instruments on October 21, 2024 and sell it today you would earn a total of 1,658 from holding MKS Instruments or generate 16.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cognex vs. MKS Instruments
Performance |
| Timeline |
| Cognex |
| MKS Instruments |
Cognex and MKS Instruments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cognex and MKS Instruments
The main advantage of trading using opposite Cognex and MKS Instruments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cognex position performs unexpectedly, MKS Instruments 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 MKS Instruments will offset losses from the drop in MKS Instruments' long position.| Cognex vs. Vontier Corp | Cognex vs. Teledyne Technologies Incorporated | Cognex vs. ESCO Technologies | Cognex vs. MKS Instruments |
| MKS Instruments vs. Vontier Corp | MKS Instruments vs. Teledyne Technologies Incorporated | MKS Instruments vs. ESCO Technologies | MKS Instruments vs. Sensata Technologies Holding |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |