Correlation Between Kopin and Alpha En

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

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

Diversification Opportunities for Kopin and Alpha En

0.01

Correlation Coefficient

Kopin  Alpha En

Significant diversification

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

Pair Corralation between Kopin and Alpha En

Given the investment horizon of 90 days Kopin is expected to under-perform the Alpha En. But the stock apears to be less risky and, when comparing its historical volatility, Kopin is 1.82 times less risky than Alpha En. The stock trades about 0.0 of its potential returns per unit of risk. The alpha En is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  0.01  in alpha En on December 28, 2024 and sell it today you would earn a total of  0.01  from holding alpha En or generate 100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Kopin  vs.  alpha En

Kopin

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kopin has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Kopin is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

alpha En

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in alpha En are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Alpha En exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kopin and Alpha En

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

The idea behind Kopin and alpha En 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.