Correlation Between II VI and Cognex

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

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

Diversification Opportunities for II VI and Cognex

0.0

Correlation Coefficient

II VI  Cognex

Pay attention - limited upside

The 3 months correlation between IIVI and Cognex is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding II VI Incorporated and Cognex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cognex and II VI 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 II VI Incorporated are associated (or correlated) with Cognex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cognex has no effect on the direction of II VI i.e., II VI and Cognex go up and down completely randomly.

Pair Corralation between II VI and Cognex

If you would invest (100.00) in II VI Incorporated on November 28, 2024 and sell it today you would earn a total of  100.00  from holding II VI Incorporated or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

II VI Incorporated  vs.  Cognex

II VI

Risk-Adjusted Performance

Very Weak

Over the last 90 days II VI Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, II VI is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Cognex

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cognex has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with II VI and Cognex

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

The idea behind II VI Incorporated and Cognex 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.