Correlation Between Pubmatic and Cognex

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

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

Diversification Opportunities for Pubmatic and Cognex

0.66

Correlation Coefficient

Pubmatic  Cognex

Poor diversification

The 3 months correlation between Pubmatic and Cognex is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Pubmatic and Cognex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cognex and Pubmatic 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 Pubmatic are associated (or correlated) with Cognex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cognex has no effect on the direction of Pubmatic i.e., Pubmatic and Cognex go up and down completely randomly.

Pair Corralation between Pubmatic and Cognex

Given the investment horizon of 90 days Pubmatic is expected to generate 2.29 times less return on investment than Cognex. But when comparing it to its historical volatility, Pubmatic is 1.06 times less risky than Cognex. It trades about 0.09 of its potential returns per unit of risk. Cognex is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  2,834  in Cognex on May 7, 2025 and sell it today you would earn a total of  1,309  from holding Cognex or generate 46.19% return on investment over 90 days.

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

Pubmatic  vs.  Cognex

Pubmatic

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pubmatic are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental drivers, Pubmatic displayed solid returns over the last few months and may actually be approaching a breakup point.

Cognex

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cognex are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Cognex showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pubmatic and Cognex

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

The idea behind Pubmatic and Cognex 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.