Correlation Between Foxconn Technology and Momo

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

By analyzing existing cross correlation between Foxconn Technology Co and momo Inc, you can compare the effects of market volatilities on Foxconn Technology and Momo 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 Foxconn Technology with a short position of Momo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Foxconn Technology and Momo.

Diversification Opportunities for Foxconn Technology and Momo

-0.19

Correlation Coefficient

Foxconn Technology  Momo

Good diversification

The 3 months correlation between Foxconn and Momo is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Foxconn Technology Co and momo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on momo Inc and Foxconn Technology 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 Foxconn Technology Co are associated (or correlated) with Momo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of momo Inc has no effect on the direction of Foxconn Technology i.e., Foxconn Technology and Momo go up and down completely randomly.

Pair Corralation between Foxconn Technology and Momo

Assuming the 90 days trading horizon Foxconn Technology Co is expected to under-perform the Momo. In addition to that, Foxconn Technology is 1.45 times more volatile than momo Inc. It trades about -0.11 of its total potential returns per unit of risk. momo Inc is currently generating about 0.06 per unit of volatility. If you would invest  34,300  in momo Inc on December 29, 2024 and sell it today you would earn a total of  1,600  from holding momo Inc or generate 4.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.25%
Values	Daily Returns

Foxconn Technology Co  vs.  momo Inc

Foxconn Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Foxconn Technology Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

momo Inc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in momo Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Momo is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Foxconn Technology and Momo

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

The idea behind Foxconn Technology Co and momo Inc 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.