Correlation Between Cohen Circle and FormFactor

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

By analyzing existing cross correlation between Cohen Circle Acquisition and FormFactor, you can compare the effects of market volatilities on Cohen Circle and FormFactor 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 Cohen Circle with a short position of FormFactor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cohen Circle and FormFactor.

Diversification Opportunities for Cohen Circle and FormFactor

0.4

Correlation Coefficient

Cohen Circle  FormFactor

Very weak diversification

The 3 months correlation between Cohen and FormFactor is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Cohen Circle Acquisition and FormFactor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FormFactor and Cohen Circle 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 Cohen Circle Acquisition are associated (or correlated) with FormFactor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FormFactor has no effect on the direction of Cohen Circle i.e., Cohen Circle and FormFactor go up and down completely randomly.

Pair Corralation between Cohen Circle and FormFactor

Assuming the 90 days horizon Cohen Circle Acquisition is expected to under-perform the FormFactor. In addition to that, Cohen Circle is 3.62 times more volatile than FormFactor. It trades about 0.0 of its total potential returns per unit of risk. FormFactor is currently generating about 0.05 per unit of volatility. If you would invest  4,300  in FormFactor on October 12, 2024 and sell it today you would earn a total of  111.00  from holding FormFactor or generate 2.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	70.0%
Values	Daily Returns

Cohen Circle Acquisition  vs.  FormFactor

Cohen Circle Acquisition

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cohen Circle Acquisition are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Cohen Circle showed solid returns over the last few months and may actually be approaching a breakup point.

FormFactor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FormFactor has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Cohen Circle and FormFactor

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

The idea behind Cohen Circle Acquisition and FormFactor 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 Stocks Directory module to find actively traded stocks across global markets.