Correlation Between KinderCare Learning and FormFactor

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

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

Diversification Opportunities for KinderCare Learning and FormFactor

-0.4

Correlation Coefficient

KinderCare Learning  FormFactor

Very good diversification

The 3 months correlation between KinderCare and FormFactor is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding KinderCare Learning Companies, and FormFactor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FormFactor and KinderCare Learning 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 KinderCare Learning Companies, 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 KinderCare Learning i.e., KinderCare Learning and FormFactor go up and down completely randomly.

Pair Corralation between KinderCare Learning and FormFactor

Considering the 90-day investment horizon KinderCare Learning Companies, is expected to generate 0.83 times more return on investment than FormFactor. However, KinderCare Learning Companies, is 1.2 times less risky than FormFactor. It trades about 0.12 of its potential returns per unit of risk. FormFactor is currently generating about -0.22 per unit of risk. If you would invest  1,744  in KinderCare Learning Companies, on December 2, 2024 and sell it today you would earn a total of  202.00  from holding KinderCare Learning Companies, or generate 11.58% return on investment over 90 days.

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

KinderCare Learning Companies,  vs.  FormFactor

KinderCare Learning

Risk-Adjusted Performance

Very Weak

Over the last 90 days KinderCare Learning Companies, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's essential indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

FormFactor

Risk-Adjusted Performance

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 weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with KinderCare Learning and FormFactor

The main advantage of trading using opposite KinderCare Learning and FormFactor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KinderCare Learning 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 KinderCare Learning Companies, 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.