Correlation Between Kopin and Wisekey International

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

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

Diversification Opportunities for Kopin and Wisekey International

0.38

Correlation Coefficient

Kopin  Wisekey International

Weak diversification

The 3 months correlation between Kopin and Wisekey is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Kopin and Wisekey International Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wisekey International 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 Wisekey International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wisekey International has no effect on the direction of Kopin i.e., Kopin and Wisekey International go up and down completely randomly.

Pair Corralation between Kopin and Wisekey International

Given the investment horizon of 90 days Kopin is expected to generate 5.24 times less return on investment than Wisekey International. But when comparing it to its historical volatility, Kopin is 6.22 times less risky than Wisekey International. It trades about 0.39 of its potential returns per unit of risk. Wisekey International Holding is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest  203.00  in Wisekey International Holding on September 20, 2024 and sell it today you would earn a total of  742.00  from holding Wisekey International Holding or generate 365.52% return on investment over 90 days.

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

Kopin  vs.  Wisekey International Holding

Kopin

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Kopin are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Kopin displayed solid returns over the last few months and may actually be approaching a breakup point.

Wisekey International

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Wisekey International Holding are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent technical and fundamental indicators, Wisekey International showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kopin and Wisekey International

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

The idea behind Kopin and Wisekey International Holding 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.

Check out your portfolio center.

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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.