Correlation Between SOCKET MOBILE and FOKUS MINING

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

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

Diversification Opportunities for SOCKET MOBILE and FOKUS MINING

-0.42

Correlation Coefficient

SOCKET MOBILE  FOKUS MINING

Very good diversification

The 3 months correlation between SOCKET and FOKUS is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding SOCKET MOBILE NEW and FOKUS MINING P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FOKUS MINING P and SOCKET MOBILE 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 SOCKET MOBILE NEW are associated (or correlated) with FOKUS MINING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FOKUS MINING P has no effect on the direction of SOCKET MOBILE i.e., SOCKET MOBILE and FOKUS MINING go up and down completely randomly.

Pair Corralation between SOCKET MOBILE and FOKUS MINING

Assuming the 90 days trading horizon SOCKET MOBILE NEW is expected to under-perform the FOKUS MINING. But the stock apears to be less risky and, when comparing its historical volatility, SOCKET MOBILE NEW is 1.69 times less risky than FOKUS MINING. The stock trades about -0.01 of its potential returns per unit of risk. The FOKUS MINING P is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  8.00  in FOKUS MINING P on April 20, 2025 and sell it today you would lose (0.20) from holding FOKUS MINING P or give up 2.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

SOCKET MOBILE NEW  vs.  FOKUS MINING P

SOCKET MOBILE NEW

Risk-Adjusted Performance

Very Weak

Over the last 90 days SOCKET MOBILE NEW has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental drivers, SOCKET MOBILE is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

FOKUS MINING P

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in FOKUS MINING P are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, FOKUS MINING is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with SOCKET MOBILE and FOKUS MINING

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

The idea behind SOCKET MOBILE NEW and FOKUS MINING P 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.