Correlation Between Fabrinet and Wallbox NV
Can any of the company-specific risk be diversified away by investing in both Fabrinet and Wallbox NV 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 Wallbox NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fabrinet and Wallbox NV, you can compare the effects of market volatilities on Fabrinet and Wallbox NV 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 Wallbox NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fabrinet and Wallbox NV.
Diversification Opportunities for Fabrinet and Wallbox NV
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fabrinet and Wallbox is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Fabrinet and Wallbox NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wallbox NV 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 Wallbox NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wallbox NV has no effect on the direction of Fabrinet i.e., Fabrinet and Wallbox NV go up and down completely randomly.
Pair Corralation between Fabrinet and Wallbox NV
Allowing for the 90-day total investment horizon Fabrinet is expected to generate 3.14 times less return on investment than Wallbox NV. But when comparing it to its historical volatility, Fabrinet is 5.13 times less risky than Wallbox NV. It trades about 0.22 of its potential returns per unit of risk. Wallbox NV is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 48.00 in Wallbox NV on October 20, 2024 and sell it today you would earn a total of 9.00 from holding Wallbox NV or generate 18.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Fabrinet vs. Wallbox NV
Performance |
| Timeline |
| Fabrinet |
| Wallbox NV |
Fabrinet and Wallbox NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fabrinet and Wallbox NV
The main advantage of trading using opposite Fabrinet and Wallbox NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fabrinet position performs unexpectedly, Wallbox NV 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 Wallbox NV will offset losses from the drop in Wallbox NV's long position.The idea behind Fabrinet and Wallbox NV 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.| Wallbox NV vs. Kopin | Wallbox NV vs. Corning Incorporated | Wallbox NV vs. KULR Technology Group | Wallbox NV vs. Ouster, Common Stock |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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