Correlation Between Fox Factory and Cooper Stnd

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

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

Diversification Opportunities for Fox Factory and Cooper Stnd

-0.23

Correlation Coefficient

Fox Factory  Cooper Stnd

Very good diversification

The 3 months correlation between Fox and Cooper is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Fox Factory Holding and Cooper Stnd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cooper Stnd and Fox Factory 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 Fox Factory Holding are associated (or correlated) with Cooper Stnd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cooper Stnd has no effect on the direction of Fox Factory i.e., Fox Factory and Cooper Stnd go up and down completely randomly.

Pair Corralation between Fox Factory and Cooper Stnd

Given the investment horizon of 90 days Fox Factory Holding is expected to under-perform the Cooper Stnd. But the stock apears to be less risky and, when comparing its historical volatility, Fox Factory Holding is 1.76 times less risky than Cooper Stnd. The stock trades about -0.08 of its potential returns per unit of risk. The Cooper Stnd is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,386  in Cooper Stnd on December 27, 2024 and sell it today you would earn a total of  241.50  from holding Cooper Stnd or generate 17.42% return on investment over 90 days.

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

Fox Factory Holding  vs.  Cooper Stnd

Fox Factory Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fox Factory Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Cooper Stnd

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cooper Stnd are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Cooper Stnd unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fox Factory and Cooper Stnd

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

The idea behind Fox Factory Holding and Cooper Stnd 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.