Correlation Between Teledyne Technologies and Cognex
Can any of the company-specific risk be diversified away by investing in both Teledyne Technologies and Cognex 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 Teledyne Technologies and Cognex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teledyne Technologies Incorporated and Cognex, you can compare the effects of market volatilities on Teledyne Technologies and Cognex 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 Teledyne Technologies with a short position of Cognex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teledyne Technologies and Cognex.
Diversification Opportunities for Teledyne Technologies and Cognex
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Teledyne and Cognex is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Teledyne Technologies Incorpor and Cognex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cognex and Teledyne Technologies 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 Teledyne Technologies Incorporated are associated (or correlated) with Cognex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cognex has no effect on the direction of Teledyne Technologies i.e., Teledyne Technologies and Cognex go up and down completely randomly.
Pair Corralation between Teledyne Technologies and Cognex
Considering the 90-day investment horizon Teledyne Technologies is expected to generate 1.37 times less return on investment than Cognex. But when comparing it to its historical volatility, Teledyne Technologies Incorporated is 1.71 times less risky than Cognex. It trades about 0.05 of its potential returns per unit of risk. Cognex is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,587 in Cognex on August 28, 2024 and sell it today you would earn a total of 566.00 from holding Cognex or generate 15.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teledyne Technologies Incorpor vs. Cognex
Performance |
| Timeline |
| Teledyne Technologies |
| Cognex |
Teledyne Technologies and Cognex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teledyne Technologies and Cognex
The main advantage of trading using opposite Teledyne Technologies and Cognex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teledyne Technologies position performs unexpectedly, Cognex 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 Cognex will offset losses from the drop in Cognex's long position.| Teledyne Technologies vs. Vontier Corp | Teledyne Technologies vs. ESCO Technologies | Teledyne Technologies vs. MKS Instruments | Teledyne Technologies vs. Sensata Technologies Holding |
| Cognex vs. Vontier Corp | Cognex vs. Teledyne Technologies Incorporated | Cognex vs. ESCO Technologies | Cognex vs. MKS Instruments |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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