Correlation Between Corning Incorporated and Neonode

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

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

Diversification Opportunities for Corning Incorporated and Neonode

0.63

Correlation Coefficient

Corning Incorporated  Neonode

Poor diversification

The 3 months correlation between Corning and Neonode is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Corning Incorporated and Neonode in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neonode and Corning Incorporated 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 Corning Incorporated are associated (or correlated) with Neonode. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neonode has no effect on the direction of Corning Incorporated i.e., Corning Incorporated and Neonode go up and down completely randomly.

Pair Corralation between Corning Incorporated and Neonode

Considering the 90-day investment horizon Corning Incorporated is expected to under-perform the Neonode. But the stock apears to be less risky and, when comparing its historical volatility, Corning Incorporated is 2.08 times less risky than Neonode. The stock trades about -0.25 of its potential returns per unit of risk. The Neonode is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  879.00  in Neonode on December 5, 2024 and sell it today you would lose (64.00) from holding Neonode or give up 7.28% of portfolio value over 90 days.

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

Corning Incorporated  vs.  Neonode

Corning Incorporated

Risk-Adjusted Performance

Very Weak

Over the last 90 days Corning Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable essential indicators, Corning Incorporated is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Neonode

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Neonode are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, Neonode displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Corning Incorporated and Neonode

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

The idea behind Corning Incorporated and Neonode 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.