Correlation Between Precision Optics, and Hoya Corp
Can any of the company-specific risk be diversified away by investing in both Precision Optics, and Hoya Corp 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 Precision Optics, and Hoya Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Precision Optics, and Hoya Corp, you can compare the effects of market volatilities on Precision Optics, and Hoya Corp 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 Precision Optics, with a short position of Hoya Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Precision Optics, and Hoya Corp.
Diversification Opportunities for Precision Optics, and Hoya Corp
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Precision and Hoya is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Precision Optics, and Hoya Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hoya Corp and Precision Optics, 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 Precision Optics, are associated (or correlated) with Hoya Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hoya Corp has no effect on the direction of Precision Optics, i.e., Precision Optics, and Hoya Corp go up and down completely randomly.
Pair Corralation between Precision Optics, and Hoya Corp
Given the investment horizon of 90 days Precision Optics, is expected to generate 2.44 times more return on investment than Hoya Corp. However, Precision Optics, is 2.44 times more volatile than Hoya Corp. It trades about 0.25 of its potential returns per unit of risk. Hoya Corp is currently generating about -0.04 per unit of risk. If you would invest 400.00 in Precision Optics, on August 24, 2024 and sell it today you would earn a total of 109.00 from holding Precision Optics, or generate 27.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Precision Optics, vs. Hoya Corp
Performance |
| Timeline |
| Precision Optics, |
| Hoya Corp |
Precision Optics, and Hoya Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Precision Optics, and Hoya Corp
The main advantage of trading using opposite Precision Optics, and Hoya Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Precision Optics, position performs unexpectedly, Hoya Corp 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 Hoya Corp will offset losses from the drop in Hoya Corp's long position.| Precision Optics, vs. Nexgel Inc | Precision Optics, vs. Avinger | Precision Optics, vs. Sharps Technology | Precision Optics, vs. Microbot Medical |
| Hoya Corp vs. BioLife Sciences | Hoya Corp vs. GlucoTrack | Hoya Corp vs. Sharps Technology | Hoya Corp vs. Wearable Health Solutions |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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