Correlation Between Microchip Technology and Kopin
Can any of the company-specific risk be diversified away by investing in both Microchip Technology and Kopin 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 Microchip Technology and Kopin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microchip Technology and Kopin, you can compare the effects of market volatilities on Microchip Technology and Kopin 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 Microchip Technology with a short position of Kopin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microchip Technology and Kopin.
Diversification Opportunities for Microchip Technology and Kopin
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Microchip and Kopin is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Microchip Technology and Kopin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kopin and Microchip Technology 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 Microchip Technology are associated (or correlated) with Kopin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kopin has no effect on the direction of Microchip Technology i.e., Microchip Technology and Kopin go up and down completely randomly.
Pair Corralation between Microchip Technology and Kopin
Given the investment horizon of 90 days Microchip Technology is expected to under-perform the Kopin. But the stock apears to be less risky and, when comparing its historical volatility, Microchip Technology is 2.51 times less risky than Kopin. The stock trades about -0.08 of its potential returns per unit of risk. The Kopin is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 79.00 in Kopin on September 2, 2024 and sell it today you would earn a total of 39.00 from holding Kopin or generate 49.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microchip Technology vs. Kopin
Performance |
| Timeline |
| Microchip Technology |
| Kopin |
Microchip Technology and Kopin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microchip Technology and Kopin
The main advantage of trading using opposite Microchip Technology and Kopin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microchip Technology position performs unexpectedly, Kopin 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 Kopin will offset losses from the drop in Kopin's long position.| Microchip Technology vs. Texas Instruments Incorporated | Microchip Technology vs. ON Semiconductor | Microchip Technology vs. Analog Devices | Microchip Technology vs. Qorvo Inc |
| Kopin vs. Universal Display | Kopin vs. Daktronics | Kopin vs. KULR Technology Group | Kopin vs. LightPath Technologies |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |