Correlation Between FormFactor and Flex
Can any of the company-specific risk be diversified away by investing in both FormFactor and Flex 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 Flex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FormFactor and Flex, you can compare the effects of market volatilities on FormFactor and Flex 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 Flex. Check out your portfolio center. Please also check ongoing floating volatility patterns of FormFactor and Flex.
Diversification Opportunities for FormFactor and Flex
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FormFactor and Flex is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding FormFactor and Flex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flex 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 Flex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flex has no effect on the direction of FormFactor i.e., FormFactor and Flex go up and down completely randomly.
Pair Corralation between FormFactor and Flex
Given the investment horizon of 90 days FormFactor is expected to under-perform the Flex. In addition to that, FormFactor is 1.36 times more volatile than Flex. It trades about -0.11 of its total potential returns per unit of risk. Flex is currently generating about 0.16 per unit of volatility. If you would invest 3,525 in Flex on August 29, 2024 and sell it today you would earn a total of 357.00 from holding Flex or generate 10.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FormFactor vs. Flex
Performance |
| Timeline |
| FormFactor |
| Flex |
FormFactor and Flex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FormFactor and Flex
The main advantage of trading using opposite FormFactor and Flex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FormFactor position performs unexpectedly, Flex 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 Flex will offset losses from the drop in Flex's long position.| FormFactor vs. Silicon Laboratories | FormFactor vs. Diodes Incorporated | FormFactor vs. MACOM Technology Solutions | FormFactor vs. Amkor Technology |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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