Correlation Between Fabrinet and Zepp Health

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

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

Diversification Opportunities for Fabrinet and Zepp Health

0.78

Correlation Coefficient

Fabrinet  Zepp Health

Poor diversification

The 3 months correlation between Fabrinet and Zepp is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Fabrinet and Zepp Health Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zepp Health Corp 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 Zepp Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zepp Health Corp has no effect on the direction of Fabrinet i.e., Fabrinet and Zepp Health go up and down completely randomly.

Pair Corralation between Fabrinet and Zepp Health

Allowing for the 90-day total investment horizon Fabrinet is expected to generate 11.07 times less return on investment than Zepp Health. But when comparing it to its historical volatility, Fabrinet is 4.66 times less risky than Zepp Health. It trades about 0.14 of its potential returns per unit of risk. Zepp Health Corp is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest  348.00  in Zepp Health Corp on July 5, 2025 and sell it today you would earn a total of  4,615  from holding Zepp Health Corp or generate 1326.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Fabrinet  vs.  Zepp Health Corp

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.

Zepp Health Corp

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Zepp Health Corp are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Zepp Health reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fabrinet and Zepp Health

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

The idea behind Fabrinet and Zepp Health Corp 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.

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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.