Correlation Between Fabrinet and KULR Technology
Can any of the company-specific risk be diversified away by investing in both Fabrinet and KULR Technology 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 KULR Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fabrinet and KULR Technology Group, you can compare the effects of market volatilities on Fabrinet and KULR Technology 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 KULR Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fabrinet and KULR Technology.
Diversification Opportunities for Fabrinet and KULR Technology
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fabrinet and KULR is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Fabrinet and KULR Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KULR Technology Group 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 KULR Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KULR Technology Group has no effect on the direction of Fabrinet i.e., Fabrinet and KULR Technology go up and down completely randomly.
Pair Corralation between Fabrinet and KULR Technology
Allowing for the 90-day total investment horizon Fabrinet is expected to under-perform the KULR Technology. But the stock apears to be less risky and, when comparing its historical volatility, Fabrinet is 1.35 times less risky than KULR Technology. The stock trades about -0.03 of its potential returns per unit of risk. The KULR Technology Group is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 228.00 in KULR Technology Group on November 18, 2024 and sell it today you would lose (15.00) from holding KULR Technology Group or give up 6.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fabrinet vs. KULR Technology Group
Performance |
| Timeline |
| Fabrinet |
| KULR Technology Group |
Fabrinet and KULR Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fabrinet and KULR Technology
The main advantage of trading using opposite Fabrinet and KULR Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fabrinet position performs unexpectedly, KULR Technology 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 KULR Technology will offset losses from the drop in KULR Technology's long position.The idea behind Fabrinet and KULR Technology Group 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.| KULR Technology vs. Richardson Electronics | KULR Technology vs. Interlink Electronics | KULR Technology vs. SigmaTron International | KULR Technology vs. Maris Tech |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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