Correlation Between FormFactor and Allient
Can any of the company-specific risk be diversified away by investing in both FormFactor and Allient 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 FormFactor and Allient into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FormFactor and Allient, you can compare the effects of market volatilities on FormFactor and Allient 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 FormFactor with a short position of Allient. Check out your portfolio center. Please also check ongoing floating volatility patterns of FormFactor and Allient.
Diversification Opportunities for FormFactor and Allient
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FormFactor and Allient is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding FormFactor and Allient in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allient and FormFactor 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 FormFactor are associated (or correlated) with Allient. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allient has no effect on the direction of FormFactor i.e., FormFactor and Allient go up and down completely randomly.
Pair Corralation between FormFactor and Allient
Given the investment horizon of 90 days FormFactor is expected to generate 1.04 times more return on investment than Allient. However, FormFactor is 1.04 times more volatile than Allient. It trades about 0.05 of its potential returns per unit of risk. Allient is currently generating about -0.01 per unit of risk. If you would invest 2,370 in FormFactor on August 27, 2024 and sell it today you would earn a total of 1,763 from holding FormFactor or generate 74.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FormFactor vs. Allient
Performance |
| Timeline |
| FormFactor |
| Allient |
FormFactor and Allient Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FormFactor and Allient
The main advantage of trading using opposite FormFactor and Allient positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FormFactor position performs unexpectedly, Allient 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 Allient will offset losses from the drop in Allient's long position.| FormFactor vs. Silicon Laboratories | FormFactor vs. Diodes Incorporated | FormFactor vs. MACOM Technology Solutions | FormFactor vs. Amkor Technology |
| Allient vs. Pentair PLC | Allient vs. Agnico Eagle Mines | Allient vs. Eldorado Gold Corp | Allient vs. Air Lease |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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