Correlation Between Integrated Media and Fabrinet
Can any of the company-specific risk be diversified away by investing in both Integrated Media and Fabrinet 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 Integrated Media and Fabrinet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Integrated Media Technology and Fabrinet, you can compare the effects of market volatilities on Integrated Media and Fabrinet 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 Integrated Media with a short position of Fabrinet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integrated Media and Fabrinet.
Diversification Opportunities for Integrated Media and Fabrinet
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Integrated and Fabrinet is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Integrated Media Technology and Fabrinet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fabrinet and Integrated Media 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 Integrated Media Technology are associated (or correlated) with Fabrinet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fabrinet has no effect on the direction of Integrated Media i.e., Integrated Media and Fabrinet go up and down completely randomly.
Pair Corralation between Integrated Media and Fabrinet
Given the investment horizon of 90 days Integrated Media Technology is expected to under-perform the Fabrinet. In addition to that, Integrated Media is 1.88 times more volatile than Fabrinet. It trades about -0.03 of its total potential returns per unit of risk. Fabrinet is currently generating about 0.06 per unit of volatility. If you would invest 12,869 in Fabrinet on September 13, 2024 and sell it today you would earn a total of 11,790 from holding Fabrinet or generate 91.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Integrated Media Technology vs. Fabrinet
Performance |
| Timeline |
| Integrated Media Tec |
| Fabrinet |
Integrated Media and Fabrinet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Integrated Media and Fabrinet
The main advantage of trading using opposite Integrated Media and Fabrinet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integrated Media position performs unexpectedly, Fabrinet 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 Fabrinet will offset losses from the drop in Fabrinet's long position.| Integrated Media vs. SigmaTron International | Integrated Media vs. Data IO | Integrated Media vs. Research Frontiers Incorporated | Integrated Media vs. Maris Tech |
| Fabrinet vs. Quantum Computing | Fabrinet vs. IONQ Inc | Fabrinet vs. Quantum | Fabrinet vs. Super Micro Computer |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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