Correlation Between Fabrinet and Infinera
Can any of the company-specific risk be diversified away by investing in both Fabrinet and Infinera 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 Infinera into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fabrinet and Infinera, you can compare the effects of market volatilities on Fabrinet and Infinera 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 Infinera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fabrinet and Infinera.
Diversification Opportunities for Fabrinet and Infinera
Weak diversification
The 3 months correlation between Fabrinet and Infinera is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Fabrinet and Infinera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infinera 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 Infinera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infinera has no effect on the direction of Fabrinet i.e., Fabrinet and Infinera go up and down completely randomly.
Pair Corralation between Fabrinet and Infinera
Allowing for the 90-day total investment horizon Fabrinet is expected to generate 1.21 times less return on investment than Infinera. In addition to that, Fabrinet is 3.65 times more volatile than Infinera. It trades about 0.03 of its total potential returns per unit of risk. Infinera is currently generating about 0.12 per unit of volatility. If you would invest 619.00 in Infinera on August 31, 2024 and sell it today you would earn a total of 42.00 from holding Infinera or generate 6.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fabrinet vs. Infinera
Performance |
| Timeline |
| Fabrinet |
| Infinera |
Fabrinet and Infinera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fabrinet and Infinera
The main advantage of trading using opposite Fabrinet and Infinera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fabrinet position performs unexpectedly, Infinera 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 Infinera will offset losses from the drop in Infinera's long position.| Fabrinet vs. Sanmina | Fabrinet vs. Benchmark Electronics | Fabrinet vs. Methode Electronics | Fabrinet vs. Celestica |
| Infinera vs. Juniper Networks | Infinera vs. Lumentum Holdings | Infinera vs. Extreme Networks | Infinera vs. Clearfield |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |