Correlation Between Fox Factory and Autoliv
Can any of the company-specific risk be diversified away by investing in both Fox Factory and Autoliv 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 Fox Factory and Autoliv into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fox Factory Holding and Autoliv, you can compare the effects of market volatilities on Fox Factory and Autoliv 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 Fox Factory with a short position of Autoliv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fox Factory and Autoliv.
Diversification Opportunities for Fox Factory and Autoliv
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fox and Autoliv is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Fox Factory Holding and Autoliv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autoliv and Fox Factory 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 Fox Factory Holding are associated (or correlated) with Autoliv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autoliv has no effect on the direction of Fox Factory i.e., Fox Factory and Autoliv go up and down completely randomly.
Pair Corralation between Fox Factory and Autoliv
Given the investment horizon of 90 days Fox Factory Holding is expected to under-perform the Autoliv. In addition to that, Fox Factory is 1.19 times more volatile than Autoliv. It trades about -0.21 of its total potential returns per unit of risk. Autoliv is currently generating about 0.01 per unit of volatility. If you would invest 9,812 in Autoliv on November 18, 2024 and sell it today you would earn a total of 3.00 from holding Autoliv or generate 0.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fox Factory Holding vs. Autoliv
Performance |
| Timeline |
| Fox Factory Holding |
| Autoliv |
Fox Factory and Autoliv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fox Factory and Autoliv
The main advantage of trading using opposite Fox Factory and Autoliv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fox Factory position performs unexpectedly, Autoliv 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 Autoliv will offset losses from the drop in Autoliv's long position.| Fox Factory vs. Dorman Products | Fox Factory vs. Malibu Boats | Fox Factory vs. Installed Building Products | Fox Factory vs. ExlService Holdings |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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