Correlation Between Monolithic Power and Kopin
Can any of the company-specific risk be diversified away by investing in both Monolithic Power 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 Monolithic Power and Kopin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Monolithic Power Systems and Kopin, you can compare the effects of market volatilities on Monolithic Power 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 Monolithic Power with a short position of Kopin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monolithic Power and Kopin.
Diversification Opportunities for Monolithic Power and Kopin
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Monolithic and Kopin is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Monolithic Power Systems and Kopin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kopin and Monolithic Power 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 Monolithic Power Systems 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 Monolithic Power i.e., Monolithic Power and Kopin go up and down completely randomly.
Pair Corralation between Monolithic Power and Kopin
Given the investment horizon of 90 days Monolithic Power Systems is expected to generate 0.55 times more return on investment than Kopin. However, Monolithic Power Systems is 1.82 times less risky than Kopin. It trades about 0.16 of its potential returns per unit of risk. Kopin is currently generating about -0.21 per unit of risk. If you would invest 61,757 in Monolithic Power Systems on November 29, 2024 and sell it today you would earn a total of 5,401 from holding Monolithic Power Systems or generate 8.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Monolithic Power Systems vs. Kopin
Performance |
| Timeline |
| Monolithic Power Systems |
| Kopin |
Monolithic Power and Kopin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monolithic Power and Kopin
The main advantage of trading using opposite Monolithic Power and Kopin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monolithic Power 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.| Monolithic Power vs. Texas Instruments Incorporated | Monolithic Power vs. Microchip Technology | Monolithic Power vs. NXP Semiconductors NV | Monolithic Power vs. ON Semiconductor |
| 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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