Correlation Between Neonode and Corning Incorporated

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

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

Diversification Opportunities for Neonode and Corning Incorporated

-0.53

Correlation Coefficient

Neonode  Corning Incorporated

Excellent diversification

The 3 months correlation between Neonode and Corning is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Neonode and Corning Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corning Incorporated and Neonode 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 Neonode 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 Neonode i.e., Neonode and Corning Incorporated go up and down completely randomly.

Pair Corralation between Neonode and Corning Incorporated

Given the investment horizon of 90 days Neonode is expected to generate 1.61 times less return on investment than Corning Incorporated. In addition to that, Neonode is 5.43 times more volatile than Corning Incorporated. It trades about 0.02 of its total potential returns per unit of risk. Corning Incorporated is currently generating about 0.14 per unit of volatility. If you would invest  4,265  in Corning Incorporated on September 16, 2024 and sell it today you would earn a total of  550.00  from holding Corning Incorporated or generate 12.9% return on investment over 90 days.

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

Neonode  vs.  Corning Incorporated

Neonode

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Neonode are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Neonode may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Corning Incorporated

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Corning Incorporated are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain essential indicators, Corning Incorporated may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Neonode and Corning Incorporated

The main advantage of trading using opposite Neonode and Corning Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neonode 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 Neonode 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.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.