Correlation Between FormFactor and Intelligent Bio
Can any of the company-specific risk be diversified away by investing in both FormFactor and Intelligent Bio 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 Intelligent Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FormFactor and Intelligent Bio Solutions, you can compare the effects of market volatilities on FormFactor and Intelligent Bio 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 Intelligent Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of FormFactor and Intelligent Bio.
Diversification Opportunities for FormFactor and Intelligent Bio
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FormFactor and Intelligent is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding FormFactor and Intelligent Bio Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intelligent Bio Solutions 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 Intelligent Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intelligent Bio Solutions has no effect on the direction of FormFactor i.e., FormFactor and Intelligent Bio go up and down completely randomly.
Pair Corralation between FormFactor and Intelligent Bio
Given the investment horizon of 90 days FormFactor is expected to generate 0.54 times more return on investment than Intelligent Bio. However, FormFactor is 1.84 times less risky than Intelligent Bio. It trades about -0.03 of its potential returns per unit of risk. Intelligent Bio Solutions is currently generating about -0.02 per unit of risk. If you would invest 4,427 in FormFactor on August 25, 2024 and sell it today you would lose (294.00) from holding FormFactor or give up 6.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FormFactor vs. Intelligent Bio Solutions
Performance |
| Timeline |
| FormFactor |
| Intelligent Bio Solutions |
FormFactor and Intelligent Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FormFactor and Intelligent Bio
The main advantage of trading using opposite FormFactor and Intelligent Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FormFactor position performs unexpectedly, Intelligent Bio 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 Intelligent Bio will offset losses from the drop in Intelligent Bio's long position.The idea behind FormFactor and Intelligent Bio Solutions 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.| Intelligent Bio vs. FormFactor | Intelligent Bio vs. Apogee Enterprises | Intelligent Bio vs. Verra Mobility Corp | Intelligent Bio vs. Bel Fuse A |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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