Correlation Between Coda Octopus and Optex Systems

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

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

Diversification Opportunities for Coda Octopus and Optex Systems

0.85

Correlation Coefficient

Coda Octopus  Optex Systems

Very poor diversification

The 3 months correlation between Coda and Optex is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Coda Octopus Group 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 Coda Octopus 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 Coda Octopus Group 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 Coda Octopus i.e., Coda Octopus and Optex Systems go up and down completely randomly.

Pair Corralation between Coda Octopus and Optex Systems

Given the investment horizon of 90 days Coda Octopus is expected to generate 1.44 times less return on investment than Optex Systems. But when comparing it to its historical volatility, Coda Octopus Group is 1.03 times less risky than Optex Systems. It trades about 0.06 of its potential returns per unit of risk. Optex Systems Holdings, is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,165  in Optex Systems Holdings, on September 9, 2025 and sell it today you would earn a total of  198.00  from holding Optex Systems Holdings, or generate 17.0% return on investment over 90 days.

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

Coda Octopus Group  vs.  Optex Systems Holdings,

Coda Octopus Group

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Coda Octopus Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain fundamental indicators, Coda Octopus sustained solid returns over the last few months and may actually be approaching a breakup point.

Optex Systems Holdings,

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Optex Systems Holdings, are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Optex Systems unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Coda Octopus and Optex Systems

The main advantage of trading using opposite Coda Octopus and Optex Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coda Octopus 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 Coda Octopus Group 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.

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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.