Correlation Between Fabrinet and ClearOne

Can any of the company-specific risk be diversified away by investing in both Fabrinet and ClearOne 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 ClearOne into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fabrinet and ClearOne, you can compare the effects of market volatilities on Fabrinet and ClearOne 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 ClearOne. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fabrinet and ClearOne.

Diversification Opportunities for Fabrinet and ClearOne

-0.48

Correlation Coefficient

Fabrinet  ClearOne

Very good diversification

The 3 months correlation between Fabrinet and ClearOne is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Fabrinet and ClearOne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ClearOne 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 ClearOne. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ClearOne has no effect on the direction of Fabrinet i.e., Fabrinet and ClearOne go up and down completely randomly.

Pair Corralation between Fabrinet and ClearOne

Allowing for the 90-day total investment horizon Fabrinet is expected to generate 0.58 times more return on investment than ClearOne. However, Fabrinet is 1.71 times less risky than ClearOne. It trades about 0.14 of its potential returns per unit of risk. ClearOne is currently generating about -0.18 per unit of risk. If you would invest  28,521  in Fabrinet on July 9, 2025 and sell it today you would earn a total of  8,508  from holding Fabrinet or generate 29.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Fabrinet  vs.  ClearOne

Fabrinet

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fabrinet are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Fabrinet displayed solid returns over the last few months and may actually be approaching a breakup point.

ClearOne

Risk-Adjusted Performance

Weakest

Over the last 90 days ClearOne has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in November 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Fabrinet and ClearOne

The main advantage of trading using opposite Fabrinet and ClearOne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fabrinet position performs unexpectedly, ClearOne 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 ClearOne will offset losses from the drop in ClearOne's long position.

The idea behind Fabrinet and ClearOne 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.

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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..