Correlation Between Focus Universal and Cognex
Can any of the company-specific risk be diversified away by investing in both Focus Universal and Cognex 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 Focus Universal and Cognex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Focus Universal and Cognex, you can compare the effects of market volatilities on Focus Universal and Cognex 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 Focus Universal with a short position of Cognex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Focus Universal and Cognex.
Diversification Opportunities for Focus Universal and Cognex
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Focus and Cognex is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Focus Universal and Cognex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cognex and Focus Universal 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 Focus Universal are associated (or correlated) with Cognex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cognex has no effect on the direction of Focus Universal i.e., Focus Universal and Cognex go up and down completely randomly.
Pair Corralation between Focus Universal and Cognex
Given the investment horizon of 90 days Focus Universal is expected to generate 1.72 times more return on investment than Cognex. However, Focus Universal is 1.72 times more volatile than Cognex. It trades about 0.01 of its potential returns per unit of risk. Cognex is currently generating about -0.28 per unit of risk. If you would invest 477.00 in Focus Universal on January 14, 2025 and sell it today you would lose (20.00) from holding Focus Universal or give up 4.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Focus Universal vs. Cognex
Performance |
| Timeline |
| Focus Universal |
| Cognex |
Focus Universal and Cognex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Focus Universal and Cognex
The main advantage of trading using opposite Focus Universal and Cognex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Focus Universal position performs unexpectedly, Cognex 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 Cognex will offset losses from the drop in Cognex's long position.| Focus Universal vs. ESCO Technologies | Focus Universal vs. Genasys | Focus Universal vs. Know Labs | Focus Universal vs. Sono Tek Corp |
| Cognex vs. Vontier Corp | Cognex vs. Teledyne Technologies Incorporated | Cognex vs. ESCO Technologies | Cognex vs. MKS Instruments |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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