Correlation Between Kopin and Corning Incorporated

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

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

Diversification Opportunities for Kopin and Corning Incorporated

0.65

Correlation Coefficient

Kopin  Corning Incorporated

Poor diversification

The 3 months correlation between Kopin and Corning is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Kopin and Corning Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corning Incorporated 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 Corning Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corning Incorporated has no effect on the direction of Kopin i.e., Kopin and Corning Incorporated go up and down completely randomly.

Pair Corralation between Kopin and Corning Incorporated

Given the investment horizon of 90 days Kopin is expected to under-perform the Corning Incorporated. In addition to that, Kopin is 3.05 times more volatile than Corning Incorporated. It trades about 0.0 of its total potential returns per unit of risk. Corning Incorporated is currently generating about 0.0 per unit of volatility. If you would invest  4,707  in Corning Incorporated on December 28, 2024 and sell it today you would lose (51.00) from holding Corning Incorporated or give up 1.08% of portfolio value over 90 days.

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

Kopin  vs.  Corning Incorporated

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.

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.

Pair Trading with Kopin and Corning Incorporated

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

The idea behind Kopin and Corning Incorporated 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 Commodity Directory module to find actively traded commodities issued by global exchanges.