Correlation Between Fabrinet and Supercom
Can any of the company-specific risk be diversified away by investing in both Fabrinet and Supercom 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 Supercom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fabrinet and Supercom, you can compare the effects of market volatilities on Fabrinet and Supercom 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 Supercom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fabrinet and Supercom.
Diversification Opportunities for Fabrinet and Supercom
Weak diversification
The 3 months correlation between Fabrinet and Supercom is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Fabrinet and Supercom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supercom 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 Supercom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Supercom has no effect on the direction of Fabrinet i.e., Fabrinet and Supercom go up and down completely randomly.
Pair Corralation between Fabrinet and Supercom
Allowing for the 90-day total investment horizon Fabrinet is expected to generate 0.32 times more return on investment than Supercom. However, Fabrinet is 3.09 times less risky than Supercom. It trades about 0.07 of its potential returns per unit of risk. Supercom is currently generating about -0.01 per unit of risk. If you would invest 12,664 in Fabrinet on September 2, 2024 and sell it today you would earn a total of 10,794 from holding Fabrinet or generate 85.23% 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. Supercom
Performance |
| Timeline |
| Fabrinet |
| Supercom |
Fabrinet and Supercom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fabrinet and Supercom
The main advantage of trading using opposite Fabrinet and Supercom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fabrinet position performs unexpectedly, Supercom 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 Supercom will offset losses from the drop in Supercom's long position.| Fabrinet vs. Desktop Metal | Fabrinet vs. Knowles Cor | Fabrinet vs. Ubiquiti Networks | Fabrinet vs. AmpliTech Group |
| Supercom vs. Zedcor Inc | Supercom vs. SSC Security Services | Supercom vs. Blue Line Protection | Supercom vs. Guardforce AI Co |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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