Correlation Between Genasys and Cognex
Can any of the company-specific risk be diversified away by investing in both Genasys 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 Genasys and Cognex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genasys and Cognex, you can compare the effects of market volatilities on Genasys 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 Genasys with a short position of Cognex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genasys and Cognex.
Diversification Opportunities for Genasys and Cognex
Weak diversification
The 3 months correlation between Genasys and Cognex is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Genasys and Cognex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cognex and Genasys 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 Genasys 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 Genasys i.e., Genasys and Cognex go up and down completely randomly.
Pair Corralation between Genasys and Cognex
Given the investment horizon of 90 days Genasys is expected to generate 6.53 times less return on investment than Cognex. In addition to that, Genasys is 1.24 times more volatile than Cognex. It trades about 0.01 of its total potential returns per unit of risk. Cognex is currently generating about 0.11 per unit of volatility. If you would invest 3,869 in Cognex on August 24, 2024 and sell it today you would earn a total of 198.00 from holding Cognex or generate 5.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genasys vs. Cognex
Performance |
| Timeline |
| Genasys |
| Cognex |
Genasys and Cognex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genasys and Cognex
The main advantage of trading using opposite Genasys and Cognex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genasys 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.The idea behind Genasys and Cognex pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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