Correlation Between Cognex and TOYO
Can any of the company-specific risk be diversified away by investing in both Cognex and TOYO 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 TOYO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cognex and TOYO Corporation, you can compare the effects of market volatilities on Cognex and TOYO 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 TOYO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cognex and TOYO.
Diversification Opportunities for Cognex and TOYO
Excellent diversification
The 3 months correlation between Cognex and TOYO is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Cognex and TOYO Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOYO 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 TOYO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TOYO has no effect on the direction of Cognex i.e., Cognex and TOYO go up and down completely randomly.
Pair Corralation between Cognex and TOYO
Assuming the 90 days horizon Cognex is expected to generate 1.57 times more return on investment than TOYO. However, Cognex is 1.57 times more volatile than TOYO Corporation. It trades about 0.08 of its potential returns per unit of risk. TOYO Corporation is currently generating about -0.07 per unit of risk. If you would invest 3,605 in Cognex on August 27, 2024 and sell it today you would earn a total of 129.00 from holding Cognex or generate 3.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cognex vs. TOYO Corp.
Performance |
| Timeline |
| Cognex |
| TOYO |
Cognex and TOYO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cognex and TOYO
The main advantage of trading using opposite Cognex and TOYO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cognex position performs unexpectedly, TOYO 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 TOYO will offset losses from the drop in TOYO's long position.| Cognex vs. SERI INDUSTRIAL EO | Cognex vs. COMBA TELECOM SYST | Cognex vs. ADRIATIC METALS LS 013355 | Cognex vs. Singapore Telecommunications Limited |
| TOYO vs. Lifeway Foods | TOYO vs. CHINA EDUCATION GROUP | TOYO vs. EEDUCATION ALBERT AB | TOYO vs. PT Indofood Sukses |
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 Stocks Directory module to find actively traded stocks across global markets.
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