Correlation Between Glaukos Corp and Cooper Companies
Can any of the company-specific risk be diversified away by investing in both Glaukos Corp and Cooper Companies 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 Glaukos Corp and Cooper Companies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Glaukos Corp and The Cooper Companies, you can compare the effects of market volatilities on Glaukos Corp and Cooper Companies 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 Glaukos Corp with a short position of Cooper Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glaukos Corp and Cooper Companies.
Diversification Opportunities for Glaukos Corp and Cooper Companies
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Glaukos and Cooper is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Glaukos Corp and The Cooper Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cooper Companies and Glaukos Corp 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 Glaukos Corp are associated (or correlated) with Cooper Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cooper Companies has no effect on the direction of Glaukos Corp i.e., Glaukos Corp and Cooper Companies go up and down completely randomly.
Pair Corralation between Glaukos Corp and Cooper Companies
Given the investment horizon of 90 days Glaukos Corp is expected to generate 1.62 times more return on investment than Cooper Companies. However, Glaukos Corp is 1.62 times more volatile than The Cooper Companies. It trades about 0.07 of its potential returns per unit of risk. The Cooper Companies is currently generating about 0.03 per unit of risk. If you would invest 4,736 in Glaukos Corp on January 25, 2024 and sell it today you would earn a total of 5,357 from holding Glaukos Corp or generate 113.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Glaukos Corp vs. The Cooper Companies
Performance |
| Timeline |
| Glaukos Corp |
| Cooper Companies |
Glaukos Corp and Cooper Companies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Glaukos Corp and Cooper Companies
The main advantage of trading using opposite Glaukos Corp and Cooper Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glaukos Corp position performs unexpectedly, Cooper Companies 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 Cooper Companies will offset losses from the drop in Cooper Companies' long position.The idea behind Glaukos Corp and The Cooper Companies 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.| Cooper Companies vs. West Pharmaceutical Services | Cooper Companies vs. Hologic | Cooper Companies vs. ICU Medical | Cooper Companies vs. Haemonetics |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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