Correlation Between Fabrinet and Koss
Can any of the company-specific risk be diversified away by investing in both Fabrinet and Koss 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 Fabrinet and Koss into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fabrinet and Koss Corporation, you can compare the effects of market volatilities on Fabrinet and Koss 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 Fabrinet with a short position of Koss. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fabrinet and Koss.
Diversification Opportunities for Fabrinet and Koss
Very weak diversification
The 3 months correlation between Fabrinet and Koss is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Fabrinet and Koss Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koss and Fabrinet 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 Fabrinet are associated (or correlated) with Koss. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koss has no effect on the direction of Fabrinet i.e., Fabrinet and Koss go up and down completely randomly.
Pair Corralation between Fabrinet and Koss
Allowing for the 90-day total investment horizon Fabrinet is expected to under-perform the Koss. In addition to that, Fabrinet is 1.59 times more volatile than Koss Corporation. It trades about -0.22 of its total potential returns per unit of risk. Koss Corporation is currently generating about -0.13 per unit of volatility. If you would invest 248.00 in Koss Corporation on January 20, 2024 and sell it today you would lose (13.00) from holding Koss Corporation or give up 5.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Fabrinet vs. Koss Corp.
Performance |
| Timeline |
| Fabrinet |
| Koss |
Fabrinet and Koss Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fabrinet and Koss
The main advantage of trading using opposite Fabrinet and Koss positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fabrinet position performs unexpectedly, Koss 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 Koss will offset losses from the drop in Koss' long position.| Fabrinet vs. Maximus | Fabrinet vs. Network 1 Technologies | Fabrinet vs. First Advantage Corp | Fabrinet vs. BrightView Holdings |
| Koss vs. LG Display Co | Koss vs. The Singing Machine | Koss vs. Wearable Devices | Koss vs. Zepp Health Corp |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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