Correlation Between Focus Universal and Cepton
Can any of the company-specific risk be diversified away by investing in both Focus Universal and Cepton 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 Cepton into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Focus Universal and Cepton Inc, you can compare the effects of market volatilities on Focus Universal and Cepton 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 Cepton. Check out your portfolio center. Please also check ongoing floating volatility patterns of Focus Universal and Cepton.
Diversification Opportunities for Focus Universal and Cepton
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Focus and Cepton is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Focus Universal and Cepton Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cepton Inc 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 Cepton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cepton Inc has no effect on the direction of Focus Universal i.e., Focus Universal and Cepton go up and down completely randomly.
Pair Corralation between Focus Universal and Cepton
Given the investment horizon of 90 days Focus Universal is expected to under-perform the Cepton. In addition to that, Focus Universal is 10.11 times more volatile than Cepton Inc. It trades about -0.03 of its total potential returns per unit of risk. Cepton Inc is currently generating about -0.11 per unit of volatility. If you would invest 315.00 in Cepton Inc on August 28, 2024 and sell it today you would lose (3.00) from holding Cepton Inc or give up 0.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Focus Universal vs. Cepton Inc
Performance |
| Timeline |
| Focus Universal |
| Cepton Inc |
Focus Universal and Cepton Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Focus Universal and Cepton
The main advantage of trading using opposite Focus Universal and Cepton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Focus Universal position performs unexpectedly, Cepton 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 Cepton will offset losses from the drop in Cepton's long position.| Focus Universal vs. ESCO Technologies | Focus Universal vs. Genasys | Focus Universal vs. Cepton Inc | Focus Universal vs. Darkpulse |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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