Correlation Between Fabrinet and Alpha En
Can any of the company-specific risk be diversified away by investing in both Fabrinet and Alpha En 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 Fabrinet and Alpha En into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fabrinet and alpha En, you can compare the effects of market volatilities on Fabrinet and Alpha En 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 Fabrinet with a short position of Alpha En. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fabrinet and Alpha En.
Diversification Opportunities for Fabrinet and Alpha En
Pay attention - limited upside
The 3 months correlation between Fabrinet and Alpha is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Fabrinet and alpha En in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on alpha En and Fabrinet 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 Fabrinet are associated (or correlated) with Alpha En. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of alpha En has no effect on the direction of Fabrinet i.e., Fabrinet and Alpha En go up and down completely randomly.
Pair Corralation between Fabrinet and Alpha En
Allowing for the 90-day total investment horizon Fabrinet is expected to generate 0.75 times more return on investment than Alpha En. However, Fabrinet is 1.34 times less risky than Alpha En. It trades about 0.04 of its potential returns per unit of risk. alpha En is currently generating about -0.06 per unit of risk. If you would invest 17,096 in Fabrinet on November 5, 2024 and sell it today you would earn a total of 4,525 from holding Fabrinet or generate 26.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.65% |
| Values | Daily Returns |
Fabrinet vs. alpha En
Performance |
| Timeline |
| Fabrinet |
| alpha En |
Fabrinet and Alpha En Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fabrinet and Alpha En
The main advantage of trading using opposite Fabrinet and Alpha En positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fabrinet position performs unexpectedly, Alpha En 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 Alpha En will offset losses from the drop in Alpha En's long position.The idea behind Fabrinet and alpha En 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.| Alpha En vs. Alps Electric Co | Alpha En vs. Bitmine Immersion Technologies | Alpha En vs. American Aires | Alpha En vs. AT S Austria |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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