Correlation Between ChipMOS Technologies and Kopin

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

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

Diversification Opportunities for ChipMOS Technologies and Kopin

0.67

Correlation Coefficient

ChipMOS Technologies  Kopin

Poor diversification

The 3 months correlation between ChipMOS and Kopin is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding ChipMOS Technologies and Kopin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kopin and ChipMOS 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 ChipMOS 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 ChipMOS Technologies i.e., ChipMOS Technologies and Kopin go up and down completely randomly.

Pair Corralation between ChipMOS Technologies and Kopin

Given the investment horizon of 90 days ChipMOS Technologies is expected to under-perform the Kopin. But the stock apears to be less risky and, when comparing its historical volatility, ChipMOS Technologies is 2.83 times less risky than Kopin. The stock trades about -0.03 of its potential returns per unit of risk. The Kopin is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  143.00  in Kopin on December 25, 2024 and sell it today you would lose (10.00) from holding Kopin or give up 6.99% of portfolio value over 90 days.

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

ChipMOS Technologies  vs.  Kopin

ChipMOS Technologies

Risk-Adjusted Performance

Very Weak

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

Kopin

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kopin are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Kopin may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with ChipMOS Technologies and Kopin

The main advantage of trading using opposite ChipMOS Technologies and Kopin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ChipMOS 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 ChipMOS 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.