Correlation Between Meta Materials and Fabrinet
Can any of the company-specific risk be diversified away by investing in both Meta Materials 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 Meta Materials and Fabrinet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meta Materials and Fabrinet, you can compare the effects of market volatilities on Meta Materials 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 Meta Materials with a short position of Fabrinet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meta Materials and Fabrinet.
Diversification Opportunities for Meta Materials and Fabrinet
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Meta and Fabrinet is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Meta Materials and Fabrinet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fabrinet and Meta Materials 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 Meta Materials 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 Meta Materials i.e., Meta Materials and Fabrinet go up and down completely randomly.
Pair Corralation between Meta Materials and Fabrinet
Given the investment horizon of 90 days Meta Materials is expected to under-perform the Fabrinet. In addition to that, Meta Materials is 5.74 times more volatile than Fabrinet. It trades about -0.03 of its total potential returns per unit of risk. Fabrinet is currently generating about 0.08 per unit of volatility. If you would invest 11,678 in Fabrinet on September 12, 2024 and sell it today you would earn a total of 11,705 from holding Fabrinet or generate 100.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.09% |
| Values | Daily Returns |
Meta Materials vs. Fabrinet
Performance |
| Timeline |
| Meta Materials |
| Fabrinet |
Meta Materials and Fabrinet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meta Materials and Fabrinet
The main advantage of trading using opposite Meta Materials and Fabrinet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meta Materials 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.| Meta Materials vs. Cps Technologies | Meta Materials vs. Kopin | Meta Materials vs. Wallbox NV | Meta Materials vs. Corning Incorporated |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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