Correlation Between Laser Photonics and Omega Flex
Can any of the company-specific risk be diversified away by investing in both Laser Photonics and Omega Flex 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 Laser Photonics and Omega Flex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Laser Photonics and Omega Flex, you can compare the effects of market volatilities on Laser Photonics and Omega Flex 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 Laser Photonics with a short position of Omega Flex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Laser Photonics and Omega Flex.
Diversification Opportunities for Laser Photonics and Omega Flex
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Laser and Omega is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Laser Photonics and Omega Flex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omega Flex and Laser Photonics 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 Laser Photonics are associated (or correlated) with Omega Flex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omega Flex has no effect on the direction of Laser Photonics i.e., Laser Photonics and Omega Flex go up and down completely randomly.
Pair Corralation between Laser Photonics and Omega Flex
Given the investment horizon of 90 days Laser Photonics is expected to generate 2.47 times more return on investment than Omega Flex. However, Laser Photonics is 2.47 times more volatile than Omega Flex. It trades about -0.06 of its potential returns per unit of risk. Omega Flex is currently generating about -0.41 per unit of risk. If you would invest 591.00 in Laser Photonics on September 24, 2024 and sell it today you would lose (41.00) from holding Laser Photonics or give up 6.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Laser Photonics vs. Omega Flex
Performance |
| Timeline |
| Laser Photonics |
| Omega Flex |
Laser Photonics and Omega Flex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Laser Photonics and Omega Flex
The main advantage of trading using opposite Laser Photonics and Omega Flex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Laser Photonics position performs unexpectedly, Omega Flex 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 Omega Flex will offset losses from the drop in Omega Flex's long position.| Laser Photonics vs. Nuburu Inc | Laser Photonics vs. JE Cleantech Holdings | Laser Photonics vs. Reelcause | Laser Photonics vs. Shapeways Holdings, Common |
| Omega Flex vs. Graco Inc | Omega Flex vs. Ametek Inc | Omega Flex vs. IDEX Corporation | Omega Flex vs. ITT Inc |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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