Correlation Between Precision Optics, and 037389BE2

Can any of the company-specific risk be diversified away by investing in both Precision Optics, and 037389BE2 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 037389BE2 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Precision Optics, and AON P, you can compare the effects of market volatilities on Precision Optics, and 037389BE2 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 037389BE2. Check out your portfolio center. Please also check ongoing floating volatility patterns of Precision Optics, and 037389BE2.

Diversification Opportunities for Precision Optics, and 037389BE2

-0.15

Correlation Coefficient

Precision Optics,  037389BE2

Good diversification

The 3 months correlation between Precision and 037389BE2 is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Precision Optics, and AON P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 037389BE2 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 037389BE2. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 037389BE2 has no effect on the direction of Precision Optics, i.e., Precision Optics, and 037389BE2 go up and down completely randomly.

Pair Corralation between Precision Optics, and 037389BE2

Given the investment horizon of 90 days Precision Optics, is expected to under-perform the 037389BE2. In addition to that, Precision Optics, is 4.33 times more volatile than AON P. It trades about -0.07 of its total potential returns per unit of risk. AON P is currently generating about -0.06 per unit of volatility. If you would invest  8,928  in AON P on December 25, 2024 and sell it today you would lose (233.00) from holding AON P or give up 2.61% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Precision Optics,  vs.  AON P

Precision Optics,

Risk-Adjusted Performance

Very Weak

Over the last 90 days Precision Optics, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

037389BE2

Risk-Adjusted Performance

Very Weak

Over the last 90 days AON P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 037389BE2 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Precision Optics, and 037389BE2

The main advantage of trading using opposite Precision Optics, and 037389BE2 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Precision Optics, position performs unexpectedly, 037389BE2 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 037389BE2 will offset losses from the drop in 037389BE2's long position.

The idea behind Precision Optics, and AON P 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.