Correlation Between Fabrinet and Meta Materials

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

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

Diversification Opportunities for Fabrinet and Meta Materials

0.0

Correlation Coefficient

Fabrinet  Meta Materials

Pay attention - limited upside

The 3 months correlation between Fabrinet and Meta is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Fabrinet and Meta Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meta Materials 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 Meta Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meta Materials has no effect on the direction of Fabrinet i.e., Fabrinet and Meta Materials go up and down completely randomly.

Pair Corralation between Fabrinet and Meta Materials

If you would invest  21,947  in Fabrinet on December 27, 2024 and sell it today you would lose (1,072) from holding Fabrinet or give up 4.88% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Fabrinet  vs.  Meta Materials

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 newest stock price disarray, may contribute to short-term losses for the investors.

Meta Materials

Risk-Adjusted Performance

Very Weak

Over the last 90 days Meta Materials has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Meta Materials is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Fabrinet and Meta Materials

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

The idea behind Fabrinet and Meta Materials 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.