Correlation Between Supercom and FormFactor
Can any of the company-specific risk be diversified away by investing in both Supercom and FormFactor 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 Supercom and FormFactor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Supercom and FormFactor, you can compare the effects of market volatilities on Supercom and FormFactor 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 Supercom with a short position of FormFactor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Supercom and FormFactor.
Diversification Opportunities for Supercom and FormFactor
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Supercom and FormFactor is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Supercom and FormFactor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FormFactor and Supercom 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 Supercom are associated (or correlated) with FormFactor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FormFactor has no effect on the direction of Supercom i.e., Supercom and FormFactor go up and down completely randomly.
Pair Corralation between Supercom and FormFactor
Given the investment horizon of 90 days Supercom is expected to under-perform the FormFactor. In addition to that, Supercom is 2.99 times more volatile than FormFactor. It trades about -0.21 of its total potential returns per unit of risk. FormFactor is currently generating about -0.15 per unit of volatility. If you would invest 3,826 in FormFactor on November 28, 2024 and sell it today you would lose (365.00) from holding FormFactor or give up 9.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Supercom vs. FormFactor
Performance |
| Timeline |
| Supercom |
| FormFactor |
Supercom and FormFactor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Supercom and FormFactor
The main advantage of trading using opposite Supercom and FormFactor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Supercom position performs unexpectedly, FormFactor 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 FormFactor will offset losses from the drop in FormFactor's long position.| Supercom vs. Zedcor Inc | Supercom vs. SSC Security Services | Supercom vs. Blue Line Protection | Supercom vs. Guardforce AI Co |
| FormFactor vs. Silicon Laboratories | FormFactor vs. Diodes Incorporated | FormFactor vs. MACOM Technology Solutions | FormFactor vs. Amkor Technology |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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