Correlation Between Precision Optics, and Gap,

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

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

Diversification Opportunities for Precision Optics, and Gap,

0.54

Correlation Coefficient

Precision Optics,  Gap,

Very weak diversification

The 3 months correlation between Precision and Gap, is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Precision Optics, and The Gap, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gap, and Precision Optics, 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 Precision Optics, are associated (or correlated) with Gap,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gap, has no effect on the direction of Precision Optics, i.e., Precision Optics, and Gap, go up and down completely randomly.

Pair Corralation between Precision Optics, and Gap,

Given the investment horizon of 90 days Precision Optics, is expected to generate 1.88 times less return on investment than Gap,. In addition to that, Precision Optics, is 1.28 times more volatile than The Gap,. It trades about 0.05 of its total potential returns per unit of risk. The Gap, is currently generating about 0.11 per unit of volatility. If you would invest  2,152  in The Gap, on October 7, 2024 and sell it today you would earn a total of  270.00  from holding The Gap, or generate 12.55% return on investment over 90 days.

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

Precision Optics,  vs.  The Gap,

Precision Optics,

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Precision Optics, are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady fundamental indicators, Precision Optics, may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Gap,

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in The Gap, are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Gap, reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Precision Optics, and Gap,

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

The idea behind Precision Optics, and The Gap, 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 Transaction History module to view history of all your transactions and understand their impact on performance.