Correlation Between Cps Technologies and Fabrinet

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

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

Diversification Opportunities for Cps Technologies and Fabrinet

0.48

Correlation Coefficient

Cps Technologies  Fabrinet

Very weak diversification

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

Pair Corralation between Cps Technologies and Fabrinet

Given the investment horizon of 90 days Cps Technologies is expected to generate 0.85 times more return on investment than Fabrinet. However, Cps Technologies is 1.18 times less risky than Fabrinet. It trades about 0.03 of its potential returns per unit of risk. Fabrinet is currently generating about 0.01 per unit of risk. If you would invest  163.00  in Cps Technologies on December 28, 2024 and sell it today you would earn a total of  5.00  from holding Cps Technologies or generate 3.07% return on investment over 90 days.

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

Cps Technologies  vs.  Fabrinet

Cps Technologies

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cps Technologies are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, Cps Technologies may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Fabrinet

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fabrinet has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Fabrinet is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Cps Technologies and Fabrinet

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

The idea behind Cps Technologies and Fabrinet 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.