Correlation Between First Foods and Electro Optical

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

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

Diversification Opportunities for First Foods and Electro Optical

1.0

Correlation Coefficient

First Foods  Electro Optical

No risk reduction

The 3 months correlation between First and Electro is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding First Foods Group and Electro Optical Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electro Optical Systems and First Foods 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 First Foods Group are associated (or correlated) with Electro Optical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electro Optical Systems has no effect on the direction of First Foods i.e., First Foods and Electro Optical go up and down completely randomly.

Pair Corralation between First Foods and Electro Optical

If you would invest  0.01  in Electro Optical Systems on August 25, 2025 and sell it today you would earn a total of  0.00  from holding Electro Optical Systems or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.48%
Values	Daily Returns

First Foods Group  vs.  Electro Optical Systems

First Foods Group

Risk-Adjusted Performance

Weakest

Over the last 90 days First Foods Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, First Foods is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Electro Optical Systems

Risk-Adjusted Performance

Weakest

Over the last 90 days Electro Optical Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Electro Optical is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with First Foods and Electro Optical

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

The idea behind First Foods Group and Electro Optical Systems 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.