Correlation Between Cognex and Novanta
Can any of the company-specific risk be diversified away by investing in both Cognex and Novanta 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 Novanta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cognex and Novanta, you can compare the effects of market volatilities on Cognex and Novanta 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 Novanta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cognex and Novanta.
Diversification Opportunities for Cognex and Novanta
Poor diversification
The 3 months correlation between Cognex and Novanta is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Cognex and Novanta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Novanta 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 Novanta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Novanta has no effect on the direction of Cognex i.e., Cognex and Novanta go up and down completely randomly.
Pair Corralation between Cognex and Novanta
Given the investment horizon of 90 days Cognex is expected to generate 1.28 times more return on investment than Novanta. However, Cognex is 1.28 times more volatile than Novanta. It trades about 0.4 of its potential returns per unit of risk. Novanta is currently generating about -0.12 per unit of risk. If you would invest 3,577 in Cognex on October 21, 2024 and sell it today you would earn a total of 396.00 from holding Cognex or generate 11.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cognex vs. Novanta
Performance |
| Timeline |
| Cognex |
| Novanta |
Cognex and Novanta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cognex and Novanta
The main advantage of trading using opposite Cognex and Novanta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cognex position performs unexpectedly, Novanta 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 Novanta will offset losses from the drop in Novanta's long position.| Cognex vs. Vontier Corp | Cognex vs. Teledyne Technologies Incorporated | Cognex vs. ESCO Technologies | Cognex vs. MKS Instruments |
| Novanta vs. Mesa Laboratories | Novanta vs. Itron Inc | Novanta vs. Fortive Corp | Novanta vs. Vishay Precision Group |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |