Correlation Between Coretec and Optex Systems

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

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

Diversification Opportunities for Coretec and Optex Systems

0.02

Correlation Coefficient

Coretec  Optex Systems

Significant diversification

The 3 months correlation between Coretec and Optex is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Coretec 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 Coretec 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 Coretec 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 Coretec i.e., Coretec and Optex Systems go up and down completely randomly.

Pair Corralation between Coretec and Optex Systems

Given the investment horizon of 90 days Coretec Group is expected to generate 7.21 times more return on investment than Optex Systems. However, Coretec is 7.21 times more volatile than Optex Systems Holdings,. It trades about 0.11 of its potential returns per unit of risk. Optex Systems Holdings, is currently generating about 0.12 per unit of risk. If you would invest  0.06  in Coretec Group on May 18, 2025 and sell it today you would lose (0.02) from holding Coretec Group or give up 33.33% of portfolio value over 90 days.

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

Coretec Group  vs.  Optex Systems Holdings,

Coretec Group

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Coretec Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Coretec reported 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 9 (%) 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 Coretec and Optex Systems

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

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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.