Correlation Between Optimax Technology and Bright Led

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Optimax Technology and Bright Led 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 Bright Led 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 Bright Led Electronics, you can compare the effects of market volatilities on Optimax Technology and Bright Led 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 Bright Led. Check out your portfolio center. Please also check ongoing floating volatility patterns of Optimax Technology and Bright Led.

Diversification Opportunities for Optimax Technology and Bright Led

OptimaxBrightDiversified AwayOptimaxBrightDiversified Away100%
-0.07
  Correlation Coefficient

Good diversification

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

Pair Corralation between Optimax Technology and Bright Led

Assuming the 90 days trading horizon Optimax Technology Corp is expected to under-perform the Bright Led. But the stock apears to be less risky and, when comparing its historical volatility, Optimax Technology Corp is 1.34 times less risky than Bright Led. The stock trades about -0.04 of its potential returns per unit of risk. The Bright Led Electronics is currently generating about 0.1 of returns per unit of risk over similar time horizon. 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

Optimax Technology Corp  vs.  Bright Led Electronics

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -50510
JavaScript chart by amCharts 3.21.153051 3031
       Timeline  
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 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 and Bright Led Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.23-2.42-1.61-0.8-0.01280.761.532.33.07 0.050.060.070.080.090.10
JavaScript chart by amCharts 3.21.153051 3031
       Returns  

Pair Trading with Optimax Technology and Bright Led

The main advantage of trading using opposite Optimax Technology and Bright Led positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Optimax Technology position performs unexpectedly, Bright Led 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 Bright Led will offset losses from the drop in Bright Led's long position.
The idea behind Optimax Technology Corp and Bright Led Electronics 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.
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.

Other Complementary Tools

Funds Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets