Correlation Between Precision Optics, and Hologic

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

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

Diversification Opportunities for Precision Optics, and Hologic

0.76

Correlation Coefficient

Precision Optics,  Hologic

Poor diversification

The 3 months correlation between Precision and Hologic is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Precision Optics, and Hologic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hologic and Precision Optics, 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 Precision Optics, are associated (or correlated) with Hologic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hologic has no effect on the direction of Precision Optics, i.e., Precision Optics, and Hologic go up and down completely randomly.

Pair Corralation between Precision Optics, and Hologic

Given the investment horizon of 90 days Precision Optics, is expected to generate 1.68 times more return on investment than Hologic. However, Precision Optics, is 1.68 times more volatile than Hologic. It trades about 0.04 of its potential returns per unit of risk. Hologic is currently generating about -0.34 per unit of risk. If you would invest  410.00  in Precision Optics, on February 5, 2025 and sell it today you would earn a total of  8.00  from holding Precision Optics, or generate 1.95% return on investment over 90 days.

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

Precision Optics,  vs.  Hologic

Precision Optics,

Risk-Adjusted Performance

Very Weak

Over the last 90 days Precision Optics, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in June 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Hologic

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hologic has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's essential indicators remain fairly strong which may send shares a bit higher in June 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Precision Optics, and Hologic

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

The idea behind Precision Optics, and Hologic 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.