Correlation Between Focus Universal and Microvision

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

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

Diversification Opportunities for Focus Universal and Microvision

0.01

Correlation Coefficient

Focus Universal  Microvision

Significant diversification

The 3 months correlation between Focus and Microvision is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Focus Universal and Microvision in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microvision and Focus Universal 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 Focus Universal are associated (or correlated) with Microvision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microvision has no effect on the direction of Focus Universal i.e., Focus Universal and Microvision go up and down completely randomly.

Pair Corralation between Focus Universal and Microvision

Given the investment horizon of 90 days Focus Universal is expected to under-perform the Microvision. In addition to that, Focus Universal is 1.01 times more volatile than Microvision. It trades about -0.12 of its total potential returns per unit of risk. Microvision is currently generating about -0.02 per unit of volatility. If you would invest  102.00  in Microvision on September 23, 2024 and sell it today you would lose (3.00) from holding Microvision or give up 2.94% of portfolio value over 90 days.

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

Focus Universal  vs.  Microvision

Focus Universal

Risk-Adjusted Performance

0 of 100

Very Weak

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

Microvision

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Microvision has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, Microvision is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Focus Universal and Microvision

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

The idea behind Focus Universal and Microvision 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.