Correlation Between Kopin and Vicor

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

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

Diversification Opportunities for Kopin and Vicor

-0.11

Correlation Coefficient

Kopin  Vicor

Good diversification

The 3 months correlation between Kopin and Vicor is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Kopin and Vicor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vicor 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 Vicor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vicor has no effect on the direction of Kopin i.e., Kopin and Vicor go up and down completely randomly.

Pair Corralation between Kopin and Vicor

Given the investment horizon of 90 days Kopin is expected to generate 2.3 times less return on investment than Vicor. In addition to that, Kopin is 1.21 times more volatile than Vicor. It trades about 0.01 of its total potential returns per unit of risk. Vicor is currently generating about 0.03 per unit of volatility. If you would invest  4,988  in Vicor on December 27, 2024 and sell it today you would earn a total of  71.00  from holding Vicor or generate 1.42% return on investment over 90 days.

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

Kopin  vs.  Vicor

Kopin

Risk-Adjusted Performance

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.

Vicor

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vicor are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain fundamental indicators, Vicor may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Kopin and Vicor

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

The idea behind Kopin and Vicor 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.