Correlation Between Dividend and POET Technologies

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

By analyzing existing cross correlation between Dividend 15 Split and POET Technologies, you can compare the effects of market volatilities on Dividend and POET Technologies 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 Dividend with a short position of POET Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dividend and POET Technologies.

Diversification Opportunities for Dividend and POET Technologies

0.85

Correlation Coefficient

Dividend  POET Technologies

Very poor diversification

The 3 months correlation between Dividend and POET is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Dividend 15 Split and POET Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on POET Technologies and Dividend 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 Dividend 15 Split are associated (or correlated) with POET Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of POET Technologies has no effect on the direction of Dividend i.e., Dividend and POET Technologies go up and down completely randomly.

Pair Corralation between Dividend and POET Technologies

Assuming the 90 days trading horizon Dividend 15 Split is expected to generate 0.35 times more return on investment than POET Technologies. However, Dividend 15 Split is 2.87 times less risky than POET Technologies. It trades about -0.04 of its potential returns per unit of risk. POET Technologies is currently generating about -0.11 per unit of risk. If you would invest  594.00  in Dividend 15 Split on December 29, 2024 and sell it today you would lose (36.00) from holding Dividend 15 Split or give up 6.06% of portfolio value over 90 days.

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

Dividend 15 Split  vs.  POET Technologies

Dividend 15 Split

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dividend 15 Split has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Dividend is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

POET Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days POET Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Dividend and POET Technologies

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

The idea behind Dividend 15 Split and POET Technologies 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.