Correlation Between Omega Flex and Laser Photonics
Can any of the company-specific risk be diversified away by investing in both Omega Flex and Laser Photonics 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 Omega Flex and Laser Photonics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Omega Flex and Laser Photonics, you can compare the effects of market volatilities on Omega Flex and Laser Photonics 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 Omega Flex with a short position of Laser Photonics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omega Flex and Laser Photonics.
Diversification Opportunities for Omega Flex and Laser Photonics
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Omega and Laser is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Omega Flex and Laser Photonics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Laser Photonics and Omega Flex 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 Omega Flex are associated (or correlated) with Laser Photonics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Laser Photonics has no effect on the direction of Omega Flex i.e., Omega Flex and Laser Photonics go up and down completely randomly.
Pair Corralation between Omega Flex and Laser Photonics
Given the investment horizon of 90 days Omega Flex is expected to under-perform the Laser Photonics. But the stock apears to be less risky and, when comparing its historical volatility, Omega Flex is 2.47 times less risky than Laser Photonics. The stock trades about -0.41 of its potential returns per unit of risk. The Laser Photonics is currently generating about -0.06 of returns per unit of risk over similar time horizon. 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 |
Omega Flex vs. Laser Photonics
Performance |
| Timeline |
| Omega Flex |
| Laser Photonics |
Omega Flex and Laser Photonics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Omega Flex and Laser Photonics
The main advantage of trading using opposite Omega Flex and Laser Photonics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Omega Flex position performs unexpectedly, Laser Photonics 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 Laser Photonics will offset losses from the drop in Laser Photonics' long position.| Omega Flex vs. Graco Inc | Omega Flex vs. Ametek Inc | Omega Flex vs. IDEX Corporation | Omega Flex vs. ITT Inc |
| Laser Photonics vs. Nuburu Inc | Laser Photonics vs. JE Cleantech Holdings | Laser Photonics vs. Reelcause | Laser Photonics vs. Shapeways Holdings, Common |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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