Correlation Between Himax Technologies and Kopin

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

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

Diversification Opportunities for Himax Technologies and Kopin

0.02

Correlation Coefficient

Himax Technologies  Kopin

Significant diversification

The 3 months correlation between Himax and Kopin is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Himax Technologies and Kopin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kopin and Himax Technologies 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 Himax Technologies are associated (or correlated) with Kopin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kopin has no effect on the direction of Himax Technologies i.e., Himax Technologies and Kopin go up and down completely randomly.

Pair Corralation between Himax Technologies and Kopin

Given the investment horizon of 90 days Himax Technologies is expected to generate 0.46 times more return on investment than Kopin. However, Himax Technologies is 2.16 times less risky than Kopin. It trades about 0.01 of its potential returns per unit of risk. Kopin is currently generating about 0.0 per unit of risk. If you would invest  685.00  in Himax Technologies on September 12, 2024 and sell it today you would lose (4.00) from holding Himax Technologies or give up 0.58% of portfolio value over 90 days.

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

Himax Technologies  vs.  Kopin

Himax Technologies

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Himax Technologies are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak primary indicators, Himax Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

Kopin

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kopin are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Kopin displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Himax Technologies and Kopin

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

The idea behind Himax Technologies and Kopin 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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.