Correlation Between Kopin and LGL

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

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

Diversification Opportunities for Kopin and LGL

0.68

Correlation Coefficient

Kopin  LGL

Poor diversification

The 3 months correlation between Kopin and LGL is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Kopin and LGL Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LGL Group 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 LGL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LGL Group has no effect on the direction of Kopin i.e., Kopin and LGL go up and down completely randomly.

Pair Corralation between Kopin and LGL

Given the investment horizon of 90 days Kopin is expected to under-perform the LGL. In addition to that, Kopin is 1.42 times more volatile than LGL Group. It trades about -0.23 of its total potential returns per unit of risk. LGL Group is currently generating about -0.05 per unit of volatility. If you would invest  665.00  in LGL Group on December 5, 2024 and sell it today you would lose (32.00) from holding LGL Group or give up 4.81% of portfolio value over 90 days.

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

Kopin  vs.  LGL Group

Kopin

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kopin are ranked lower than 3 (%) 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.

LGL Group

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in LGL Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain technical and fundamental indicators, LGL may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Kopin and LGL

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

The idea behind Kopin and LGL Group 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.