Correlation Between FTC Solar and Kopin

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

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

Diversification Opportunities for FTC Solar and Kopin

-0.81

Correlation Coefficient

FTC Solar  Kopin

Pay attention - limited upside

The 3 months correlation between FTC and Kopin is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding FTC Solar and Kopin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kopin and FTC Solar 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 FTC Solar are associated (or correlated) with Kopin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kopin has no effect on the direction of FTC Solar i.e., FTC Solar and Kopin go up and down completely randomly.

Pair Corralation between FTC Solar and Kopin

Given the investment horizon of 90 days FTC Solar is expected to under-perform the Kopin. In addition to that, FTC Solar is 1.34 times more volatile than Kopin. It trades about -0.09 of its total potential returns per unit of risk. Kopin is currently generating about 0.25 per unit of volatility. If you would invest  63.00  in Kopin on September 25, 2024 and sell it today you would earn a total of  66.00  from holding Kopin or generate 104.76% return on investment over 90 days.

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

FTC Solar  vs.  Kopin

FTC Solar

Risk-Adjusted Performance

0 of 100

Very Weak

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

Kopin

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Kopin are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Kopin displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FTC Solar and Kopin

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

The idea behind FTC Solar and Kopin 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.