Correlation Between Fabrinet and Knightscope
Can any of the company-specific risk be diversified away by investing in both Fabrinet and Knightscope 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 Knightscope into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fabrinet and Knightscope, you can compare the effects of market volatilities on Fabrinet and Knightscope 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 Knightscope. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fabrinet and Knightscope.
Diversification Opportunities for Fabrinet and Knightscope
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Fabrinet and Knightscope is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Fabrinet and Knightscope in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Knightscope 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 Knightscope. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Knightscope has no effect on the direction of Fabrinet i.e., Fabrinet and Knightscope go up and down completely randomly.
Pair Corralation between Fabrinet and Knightscope
Allowing for the 90-day total investment horizon Fabrinet is expected to generate 1.6 times less return on investment than Knightscope. But when comparing it to its historical volatility, Fabrinet is 2.73 times less risky than Knightscope. It trades about 0.07 of its potential returns per unit of risk. Knightscope is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,190 in Knightscope on September 2, 2024 and sell it today you would lose (391.00) from holding Knightscope or give up 17.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fabrinet vs. Knightscope
Performance |
| Timeline |
| Fabrinet |
| Knightscope |
Fabrinet and Knightscope Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fabrinet and Knightscope
The main advantage of trading using opposite Fabrinet and Knightscope positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fabrinet position performs unexpectedly, Knightscope 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 Knightscope will offset losses from the drop in Knightscope's long position.| Fabrinet vs. Desktop Metal | Fabrinet vs. Knowles Cor | Fabrinet vs. Ubiquiti Networks | Fabrinet vs. AmpliTech Group |
| Knightscope vs. LogicMark | Knightscope vs. Guardforce AI Co | Knightscope vs. Bridger Aerospace Group | Knightscope vs. Iveda Solutions |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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