Correlation Between Micropac Industries and Inrad Optics
Can any of the company-specific risk be diversified away by investing in both Micropac Industries and Inrad Optics 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 Micropac Industries and Inrad Optics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micropac Industries and Inrad Optics, you can compare the effects of market volatilities on Micropac Industries and Inrad Optics 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 Micropac Industries with a short position of Inrad Optics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micropac Industries and Inrad Optics.
Diversification Opportunities for Micropac Industries and Inrad Optics
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Micropac and Inrad is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Micropac Industries and Inrad Optics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inrad Optics and Micropac Industries 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 Micropac Industries are associated (or correlated) with Inrad Optics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inrad Optics has no effect on the direction of Micropac Industries i.e., Micropac Industries and Inrad Optics go up and down completely randomly.
Pair Corralation between Micropac Industries and Inrad Optics
If you would invest 1,568 in Micropac Industries on October 20, 2024 and sell it today you would earn a total of 429.00 from holding Micropac Industries or generate 27.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 2.0% |
| Values | Daily Returns |
Micropac Industries vs. Inrad Optics
Performance |
| Timeline |
| Micropac Industries |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| Inrad Optics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Micropac Industries and Inrad Optics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Micropac Industries and Inrad Optics
The main advantage of trading using opposite Micropac Industries and Inrad Optics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micropac Industries position performs unexpectedly, Inrad Optics 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 Inrad Optics will offset losses from the drop in Inrad Optics' long position.| Micropac Industries vs. LGL Group | Micropac Industries vs. Deswell Industries | Micropac Industries vs. SigmaTron International | Micropac Industries vs. Daktronics |
| Inrad Optics vs. M tron Industries | Inrad Optics vs. Ieh Corp | Inrad Optics vs. Deswell Industries | Inrad Optics vs. LSI Industries |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| CEOs Directory Screen CEOs from public companies around the world |