Correlation Between Worksport and Fox Factory
Can any of the company-specific risk be diversified away by investing in both Worksport and Fox Factory 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 Worksport and Fox Factory into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Worksport and Fox Factory Holding, you can compare the effects of market volatilities on Worksport and Fox Factory 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 Worksport with a short position of Fox Factory. Check out your portfolio center. Please also check ongoing floating volatility patterns of Worksport and Fox Factory.
Diversification Opportunities for Worksport and Fox Factory
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Worksport and Fox is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Worksport and Fox Factory Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fox Factory Holding and Worksport 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 Worksport are associated (or correlated) with Fox Factory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fox Factory Holding has no effect on the direction of Worksport i.e., Worksport and Fox Factory go up and down completely randomly.
Pair Corralation between Worksport and Fox Factory
Given the investment horizon of 90 days Worksport is expected to generate 2.04 times more return on investment than Fox Factory. However, Worksport is 2.04 times more volatile than Fox Factory Holding. It trades about 0.01 of its potential returns per unit of risk. Fox Factory Holding is currently generating about -0.06 per unit of risk. If you would invest 146.00 in Worksport on August 24, 2024 and sell it today you would lose (82.00) from holding Worksport or give up 56.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Worksport vs. Fox Factory Holding
Performance |
| Timeline |
| Worksport |
| Fox Factory Holding |
Worksport and Fox Factory Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Worksport and Fox Factory
The main advantage of trading using opposite Worksport and Fox Factory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Worksport position performs unexpectedly, Fox Factory 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 Fox Factory will offset losses from the drop in Fox Factory's long position.The idea behind Worksport and Fox Factory Holding pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Fox Factory vs. Dorman Products | Fox Factory vs. Malibu Boats | Fox Factory vs. Installed Building Products | Fox Factory vs. ExlService Holdings |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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