Correlation Between Cognex and Microvision
Can any of the company-specific risk be diversified away by investing in both Cognex and Microvision 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 Microvision into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cognex and Microvision, you can compare the effects of market volatilities on Cognex and Microvision 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 Microvision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cognex and Microvision.
Diversification Opportunities for Cognex and Microvision
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cognex and Microvision is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Cognex and Microvision in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microvision 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 Microvision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microvision has no effect on the direction of Cognex i.e., Cognex and Microvision go up and down completely randomly.
Pair Corralation between Cognex and Microvision
Given the investment horizon of 90 days Cognex is expected to generate 0.52 times more return on investment than Microvision. However, Cognex is 1.93 times less risky than Microvision. It trades about 0.02 of its potential returns per unit of risk. Microvision is currently generating about -0.06 per unit of risk. If you would invest 3,775 in Cognex on September 4, 2024 and sell it today you would earn a total of 151.00 from holding Cognex or generate 4.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cognex vs. Microvision
Performance |
| Timeline |
| Cognex |
| Microvision |
Cognex and Microvision Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cognex and Microvision
The main advantage of trading using opposite Cognex and Microvision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cognex position performs unexpectedly, Microvision 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 Microvision will offset losses from the drop in Microvision's long position.| Cognex vs. Vontier Corp | Cognex vs. Teledyne Technologies Incorporated | Cognex vs. ESCO Technologies | Cognex vs. MKS Instruments |
| Microvision vs. Focus Universal | Microvision vs. ESCO Technologies | Microvision vs. Genasys | Microvision vs. Cepton Inc |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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