Correlation Between KULR Technology and Fabrinet
Can any of the company-specific risk be diversified away by investing in both KULR Technology 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 KULR Technology and Fabrinet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KULR Technology Group and Fabrinet, you can compare the effects of market volatilities on KULR Technology 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 KULR Technology with a short position of Fabrinet. Check out your portfolio center. Please also check ongoing floating volatility patterns of KULR Technology and Fabrinet.
Diversification Opportunities for KULR Technology and Fabrinet
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between KULR and Fabrinet is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding KULR Technology Group and Fabrinet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fabrinet and KULR Technology 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 KULR Technology Group 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 KULR Technology i.e., KULR Technology and Fabrinet go up and down completely randomly.
Pair Corralation between KULR Technology and Fabrinet
Given the investment horizon of 90 days KULR Technology Group is expected to generate 2.95 times more return on investment than Fabrinet. However, KULR Technology is 2.95 times more volatile than Fabrinet. It trades about 0.05 of its potential returns per unit of risk. Fabrinet is currently generating about 0.06 per unit of risk. If you would invest 35.00 in KULR Technology Group on August 24, 2024 and sell it today you would earn a total of 9.00 from holding KULR Technology Group or generate 25.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KULR Technology Group vs. Fabrinet
Performance |
| Timeline |
| KULR Technology Group |
| Fabrinet |
KULR Technology and Fabrinet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KULR Technology and Fabrinet
The main advantage of trading using opposite KULR Technology and Fabrinet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KULR Technology 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.| KULR Technology vs. Richardson Electronics | KULR Technology vs. Interlink Electronics | KULR Technology vs. SigmaTron International | KULR Technology vs. Maris Tech |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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