Correlation Between Coda Octopus and Flex
Can any of the company-specific risk be diversified away by investing in both Coda Octopus and Flex 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 Coda Octopus and Flex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coda Octopus Group and Flex, you can compare the effects of market volatilities on Coda Octopus and Flex 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 Coda Octopus with a short position of Flex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coda Octopus and Flex.
Diversification Opportunities for Coda Octopus and Flex
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Coda and Flex is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Coda Octopus Group and Flex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flex and Coda Octopus 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 Coda Octopus Group are associated (or correlated) with Flex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flex has no effect on the direction of Coda Octopus i.e., Coda Octopus and Flex go up and down completely randomly.
Pair Corralation between Coda Octopus and Flex
Given the investment horizon of 90 days Coda Octopus is expected to generate 1.75 times less return on investment than Flex. In addition to that, Coda Octopus is 1.9 times more volatile than Flex. It trades about 0.06 of its total potential returns per unit of risk. Flex is currently generating about 0.2 per unit of volatility. If you would invest 4,238 in Flex on May 31, 2025 and sell it today you would earn a total of 1,124 from holding Flex or generate 26.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coda Octopus Group vs. Flex
Performance |
| Timeline |
| Coda Octopus Group |
| Flex |
Coda Octopus and Flex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coda Octopus and Flex
The main advantage of trading using opposite Coda Octopus and Flex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coda Octopus position performs unexpectedly, Flex 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 Flex will offset losses from the drop in Flex's long position.| Coda Octopus vs. Innovative Solutions and | Coda Octopus vs. Park Electrochemical | Coda Octopus vs. Ducommun Incorporated | Coda Octopus vs. National Presto Industries |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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