Correlation Between Cooper Stnd and Socket Mobile

Can any of the company-specific risk be diversified away by investing in both Cooper Stnd and Socket Mobile 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 Cooper Stnd and Socket Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cooper Stnd and Socket Mobile, you can compare the effects of market volatilities on Cooper Stnd and Socket Mobile 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 Cooper Stnd with a short position of Socket Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cooper Stnd and Socket Mobile.

Diversification Opportunities for Cooper Stnd and Socket Mobile

0.36

Correlation Coefficient

Cooper Stnd  Socket Mobile

Weak diversification

The 3 months correlation between Cooper and Socket is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Cooper Stnd and Socket Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Socket Mobile and Cooper Stnd 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 Cooper Stnd are associated (or correlated) with Socket Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Socket Mobile has no effect on the direction of Cooper Stnd i.e., Cooper Stnd and Socket Mobile go up and down completely randomly.

Pair Corralation between Cooper Stnd and Socket Mobile

Considering the 90-day investment horizon Cooper Stnd is expected to under-perform the Socket Mobile. But the stock apears to be less risky and, when comparing its historical volatility, Cooper Stnd is 1.07 times less risky than Socket Mobile. The stock trades about -0.09 of its potential returns per unit of risk. The Socket Mobile is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  140.00  in Socket Mobile on October 6, 2024 and sell it today you would lose (6.00) from holding Socket Mobile or give up 4.29% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Cooper Stnd  vs.  Socket Mobile

Cooper Stnd

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cooper Stnd are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Cooper Stnd may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Socket Mobile

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Socket Mobile are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak forward-looking signals, Socket Mobile unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cooper Stnd and Socket Mobile

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

The idea behind Cooper Stnd and Socket Mobile 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.