Correlation Between Focus Universal and Novanta
Can any of the company-specific risk be diversified away by investing in both Focus Universal 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 Focus Universal and Novanta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Focus Universal and Novanta, you can compare the effects of market volatilities on Focus Universal 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 Focus Universal with a short position of Novanta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Focus Universal and Novanta.
Diversification Opportunities for Focus Universal and Novanta
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Focus and Novanta is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Focus Universal and Novanta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Novanta 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 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 Focus Universal i.e., Focus Universal and Novanta go up and down completely randomly.
Pair Corralation between Focus Universal and Novanta
Given the investment horizon of 90 days Focus Universal is expected to generate 3.27 times more return on investment than Novanta. However, Focus Universal is 3.27 times more volatile than Novanta. It trades about 0.03 of its potential returns per unit of risk. Novanta is currently generating about 0.02 per unit of risk. If you would invest 27.00 in Focus Universal on August 24, 2024 and sell it today you would lose (1.50) from holding Focus Universal or give up 5.56% 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. Novanta
Performance |
| Timeline |
| Focus Universal |
| Novanta |
Focus Universal and Novanta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Focus Universal and Novanta
The main advantage of trading using opposite Focus Universal and Novanta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Focus Universal 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.| Focus Universal vs. ESCO Technologies | Focus Universal vs. Genasys | Focus Universal vs. Cepton Inc | Focus Universal vs. Know Labs |
| 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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