Correlation Between Focus Universal and Microvision
Can any of the company-specific risk be diversified away by investing in both Focus Universal 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 Focus Universal and Microvision into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Focus Universal and Microvision, you can compare the effects of market volatilities on Focus Universal 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 Focus Universal with a short position of Microvision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Focus Universal and Microvision.
Diversification Opportunities for Focus Universal and Microvision
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Focus and Microvision is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Focus Universal and Microvision in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microvision 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 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 Focus Universal i.e., Focus Universal and Microvision go up and down completely randomly.
Pair Corralation between Focus Universal and Microvision
Given the investment horizon of 90 days Focus Universal is expected to generate 5.1 times more return on investment than Microvision. However, Focus Universal is 5.1 times more volatile than Microvision. It trades about 0.18 of its potential returns per unit of risk. Microvision is currently generating about 0.13 per unit of risk. If you would invest 346.00 in Focus Universal on November 3, 2024 and sell it today you would earn a total of 263.00 from holding Focus Universal or generate 76.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Focus Universal vs. Microvision
Performance |
| Timeline |
| Focus Universal |
| Microvision |
Focus Universal and Microvision Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Focus Universal and Microvision
The main advantage of trading using opposite Focus Universal and Microvision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Focus Universal 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.| Focus Universal vs. ESCO Technologies | Focus Universal vs. Genasys | Focus Universal vs. Know Labs | Focus Universal vs. Sono Tek Corp |
| Microvision vs. Focus Universal | Microvision vs. ESCO Technologies | Microvision vs. Genasys | Microvision vs. Coherent |
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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