Correlation Between Kopin and Micropac Industries
Can any of the company-specific risk be diversified away by investing in both Kopin and Micropac Industries 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 Kopin and Micropac Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kopin and Micropac Industries, you can compare the effects of market volatilities on Kopin and Micropac Industries 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 Kopin with a short position of Micropac Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kopin and Micropac Industries.
Diversification Opportunities for Kopin and Micropac Industries
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Kopin and Micropac is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Kopin and Micropac Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Micropac Industries and Kopin 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 Kopin are associated (or correlated) with Micropac Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Micropac Industries has no effect on the direction of Kopin i.e., Kopin and Micropac Industries go up and down completely randomly.
Pair Corralation between Kopin and Micropac Industries
Given the investment horizon of 90 days Kopin is expected to generate 1.15 times more return on investment than Micropac Industries. However, Kopin is 1.15 times more volatile than Micropac Industries. It trades about 0.23 of its potential returns per unit of risk. Micropac Industries is currently generating about 0.2 per unit of risk. If you would invest 83.00 in Kopin on August 28, 2024 and sell it today you would earn a total of 25.00 from holding Kopin or generate 30.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kopin vs. Micropac Industries
Performance |
| Timeline |
| Kopin |
| Micropac Industries |
Kopin and Micropac Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kopin and Micropac Industries
The main advantage of trading using opposite Kopin and Micropac Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kopin position performs unexpectedly, Micropac Industries 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 Micropac Industries will offset losses from the drop in Micropac Industries' long position.| Kopin vs. Universal Display | Kopin vs. Daktronics | Kopin vs. KULR Technology Group | Kopin vs. LightPath Technologies |
| Micropac Industries vs. LGL Group | Micropac Industries vs. Deswell Industries | Micropac Industries vs. SigmaTron International | Micropac Industries vs. Daktronics |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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