Correlation Between FormFactor and Helport AI

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

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

Diversification Opportunities for FormFactor and Helport AI

-0.3

Correlation Coefficient

FormFactor  Helport AI

Very good diversification

The 3 months correlation between FormFactor and Helport is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding FormFactor and Helport AI Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Helport AI Limited and FormFactor 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 FormFactor are associated (or correlated) with Helport AI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Helport AI Limited has no effect on the direction of FormFactor i.e., FormFactor and Helport AI go up and down completely randomly.

Pair Corralation between FormFactor and Helport AI

Given the investment horizon of 90 days FormFactor is expected to generate 0.4 times more return on investment than Helport AI. However, FormFactor is 2.49 times less risky than Helport AI. It trades about 0.16 of its potential returns per unit of risk. Helport AI Limited is currently generating about 0.06 per unit of risk. If you would invest  3,877  in FormFactor on September 5, 2024 and sell it today you would earn a total of  371.00  from holding FormFactor or generate 9.57% return on investment over 90 days.

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

FormFactor  vs.  Helport AI Limited

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 very healthy basic indicators, FormFactor is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Helport AI Limited

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Helport AI Limited are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile basic indicators, Helport AI demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FormFactor and Helport AI

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

The idea behind FormFactor and Helport AI Limited 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.