Correlation Between Fox Factory and Cooper Stnd
Can any of the company-specific risk be diversified away by investing in both Fox Factory and Cooper Stnd 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 Cooper Stnd 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 Cooper Stnd, you can compare the effects of market volatilities on Fox Factory and Cooper Stnd 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 Cooper Stnd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fox Factory and Cooper Stnd.
Diversification Opportunities for Fox Factory and Cooper Stnd
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fox and Cooper is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Fox Factory Holding and Cooper Stnd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cooper Stnd 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 Cooper Stnd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cooper Stnd has no effect on the direction of Fox Factory i.e., Fox Factory and Cooper Stnd go up and down completely randomly.
Pair Corralation between Fox Factory and Cooper Stnd
Given the investment horizon of 90 days Fox Factory Holding is expected to under-perform the Cooper Stnd. But the stock apears to be less risky and, when comparing its historical volatility, Fox Factory Holding is 1.97 times less risky than Cooper Stnd. The stock trades about -0.2 of its potential returns per unit of risk. The Cooper Stnd is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,369 in Cooper Stnd on August 27, 2024 and sell it today you would earn a total of 99.00 from holding Cooper Stnd or generate 7.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fox Factory Holding vs. Cooper Stnd
Performance |
| Timeline |
| Fox Factory Holding |
| Cooper Stnd |
Fox Factory and Cooper Stnd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fox Factory and Cooper Stnd
The main advantage of trading using opposite Fox Factory and Cooper Stnd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fox Factory position performs unexpectedly, Cooper Stnd 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 Cooper Stnd will offset losses from the drop in Cooper Stnd's long position.| Fox Factory vs. Dorman Products | Fox Factory vs. Malibu Boats | Fox Factory vs. Installed Building Products | Fox Factory vs. ExlService Holdings |
| Cooper Stnd vs. Dorman Products | Cooper Stnd vs. Monro Muffler Brake | Cooper Stnd vs. Standard Motor Products | Cooper Stnd vs. Stoneridge |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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