Correlation Between Broadstone Net and FormFactor
Can any of the company-specific risk be diversified away by investing in both Broadstone Net and FormFactor 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 Broadstone Net and FormFactor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Broadstone Net Lease and FormFactor, you can compare the effects of market volatilities on Broadstone Net and FormFactor 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 Broadstone Net with a short position of FormFactor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Broadstone Net and FormFactor.
Diversification Opportunities for Broadstone Net and FormFactor
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Broadstone and FormFactor is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Broadstone Net Lease and FormFactor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FormFactor and Broadstone Net 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 Broadstone Net Lease are associated (or correlated) with FormFactor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FormFactor has no effect on the direction of Broadstone Net i.e., Broadstone Net and FormFactor go up and down completely randomly.
Pair Corralation between Broadstone Net and FormFactor
Considering the 90-day investment horizon Broadstone Net is expected to generate 1.51 times less return on investment than FormFactor. But when comparing it to its historical volatility, Broadstone Net Lease is 2.49 times less risky than FormFactor. It trades about 0.05 of its potential returns per unit of risk. FormFactor is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 3,663 in FormFactor on September 2, 2024 and sell it today you would earn a total of 343.00 from holding FormFactor or generate 9.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Broadstone Net Lease vs. FormFactor
Performance |
| Timeline |
| Broadstone Net Lease |
| FormFactor |
Broadstone Net and FormFactor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Broadstone Net and FormFactor
The main advantage of trading using opposite Broadstone Net and FormFactor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Broadstone Net position performs unexpectedly, FormFactor 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 FormFactor will offset losses from the drop in FormFactor's long position.| Broadstone Net vs. Armada Hflr Pr | Broadstone Net vs. Brightspire Capital | Broadstone Net vs. Safehold | Broadstone Net vs. Essential Properties Realty |
| FormFactor vs. NXP Semiconductors NV | FormFactor vs. GSI Technology | FormFactor vs. MaxLinear | FormFactor vs. Texas Instruments Incorporated |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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