Correlation Between Bright Led and Optimax Technology

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Can any of the company-specific risk be diversified away by investing in both Bright Led and Optimax Technology 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 Bright Led and Optimax Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bright Led Electronics and Optimax Technology Corp, you can compare the effects of market volatilities on Bright Led and Optimax Technology 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 Bright Led with a short position of Optimax Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bright Led and Optimax Technology.

Diversification Opportunities for Bright Led and Optimax Technology

BrightOptimaxDiversified AwayBrightOptimaxDiversified Away100%
-0.07
  Correlation Coefficient

Good diversification

The 3 months correlation between Bright and Optimax is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Bright Led Electronics and Optimax Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Optimax Technology Corp and Bright Led 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 Bright Led Electronics are associated (or correlated) with Optimax Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Optimax Technology Corp has no effect on the direction of Bright Led i.e., Bright Led and Optimax Technology go up and down completely randomly.

Pair Corralation between Bright Led and Optimax Technology

Assuming the 90 days trading horizon Bright Led Electronics is expected to generate 1.34 times more return on investment than Optimax Technology. However, Bright Led is 1.34 times more volatile than Optimax Technology Corp. It trades about 0.1 of its potential returns per unit of risk. Optimax Technology Corp is currently generating about -0.04 per unit of risk. If you would invest  2,110  in Bright Led Electronics on November 21, 2024 and sell it today you would earn a total of  300.00  from holding Bright Led Electronics or generate 14.22% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Bright Led Electronics  vs.  Optimax Technology Corp

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -50510
JavaScript chart by amCharts 3.21.153031 3051
       Timeline  
Bright Led Electronics 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Bright Led Electronics are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Bright Led showed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb202122232425
Optimax Technology Corp 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Optimax Technology Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Optimax Technology is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb303132333435

Bright Led and Optimax Technology Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-7.97-5.97-3.97-1.970.03342.044.116.188.26 0.020.040.060.080.10
JavaScript chart by amCharts 3.21.153031 3051
       Returns  

Pair Trading with Bright Led and Optimax Technology

The main advantage of trading using opposite Bright Led and Optimax Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bright Led position performs unexpectedly, Optimax Technology 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 Optimax Technology will offset losses from the drop in Optimax Technology's long position.
The idea behind Bright Led Electronics and Optimax Technology Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.

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