Correlation Between Table Trac and Optex Systems

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

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

Diversification Opportunities for Table Trac and Optex Systems

0.24

Correlation Coefficient

Table Trac  Optex Systems

Modest diversification

The 3 months correlation between Table and Optex is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Table Trac and Optex Systems Holdings, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Optex Systems Holdings, and Table Trac 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 Table Trac are associated (or correlated) with Optex Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Optex Systems Holdings, has no effect on the direction of Table Trac i.e., Table Trac and Optex Systems go up and down completely randomly.

Pair Corralation between Table Trac and Optex Systems

Given the investment horizon of 90 days Table Trac is expected to generate 0.81 times more return on investment than Optex Systems. However, Table Trac is 1.23 times less risky than Optex Systems. It trades about 0.05 of its potential returns per unit of risk. Optex Systems Holdings, is currently generating about 0.04 per unit of risk. If you would invest  397.00  in Table Trac on September 14, 2024 and sell it today you would earn a total of  28.00  from holding Table Trac or generate 7.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Table Trac  vs.  Optex Systems Holdings,

Table Trac

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Table Trac are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Table Trac may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Optex Systems Holdings,

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Optex Systems Holdings, are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Optex Systems may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Table Trac and Optex Systems

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

The idea behind Table Trac and Optex Systems Holdings, 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.

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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.