Correlation Between Meta Materials and Fabrinet

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

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

Diversification Opportunities for Meta Materials and Fabrinet

0.0

Correlation Coefficient

Meta Materials  Fabrinet

Pay attention - limited upside

The 3 months correlation between Meta and Fabrinet is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Meta Materials and Fabrinet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fabrinet and Meta Materials 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 Meta Materials 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 Meta Materials i.e., Meta Materials and Fabrinet go up and down completely randomly.

Pair Corralation between Meta Materials and Fabrinet

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

Meta Materials  vs.  Fabrinet

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.

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.

Pair Trading with Meta Materials and Fabrinet

The main advantage of trading using opposite Meta Materials and Fabrinet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meta Materials 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 Meta Materials 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.

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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.