Correlation Between Optimax Technology and Asia Optical

Can any of the company-specific risk be diversified away by investing in both Optimax Technology and Asia Optical 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 Optimax Technology and Asia Optical into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Optimax Technology Corp and Asia Optical Co, you can compare the effects of market volatilities on Optimax Technology and Asia Optical 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 Optimax Technology with a short position of Asia Optical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Optimax Technology and Asia Optical.

Diversification Opportunities for Optimax Technology and Asia Optical

-0.28

Correlation Coefficient

Optimax Technology  Asia Optical

Very good diversification

The 3 months correlation between Optimax and Asia is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Optimax Technology Corp and Asia Optical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Optical and Optimax Technology 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 Optimax Technology Corp are associated (or correlated) with Asia Optical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Optical has no effect on the direction of Optimax Technology i.e., Optimax Technology and Asia Optical go up and down completely randomly.

Pair Corralation between Optimax Technology and Asia Optical

Assuming the 90 days trading horizon Optimax Technology Corp is expected to generate 0.59 times more return on investment than Asia Optical. However, Optimax Technology Corp is 1.7 times less risky than Asia Optical. It trades about 0.1 of its potential returns per unit of risk. Asia Optical Co is currently generating about 0.02 per unit of risk. If you would invest  3,020  in Optimax Technology Corp on September 14, 2024 and sell it today you would earn a total of  350.00  from holding Optimax Technology Corp or generate 11.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Optimax Technology Corp  vs.  Asia Optical Co

Optimax Technology Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Optimax Technology Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Optimax Technology may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Asia Optical

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Asia Optical Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Asia Optical is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Optimax Technology and Asia Optical

The main advantage of trading using opposite Optimax Technology and Asia Optical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Optimax Technology position performs unexpectedly, Asia Optical 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 Asia Optical will offset losses from the drop in Asia Optical's long position.

The idea behind Optimax Technology Corp and Asia Optical Co 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.