Correlation Between Maris Tech and Fabrinet

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

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

Diversification Opportunities for Maris Tech and Fabrinet

0.27

Correlation Coefficient

Maris Tech  Fabrinet

Modest diversification

The 3 months correlation between Maris and Fabrinet is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Maris Tech and Fabrinet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fabrinet and Maris Tech 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 Maris Tech 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 Maris Tech i.e., Maris Tech and Fabrinet go up and down completely randomly.

Pair Corralation between Maris Tech and Fabrinet

Given the investment horizon of 90 days Maris Tech is expected to under-perform the Fabrinet. In addition to that, Maris Tech is 1.54 times more volatile than Fabrinet. It trades about -0.11 of its total potential returns per unit of risk. Fabrinet is currently generating about 0.03 per unit of volatility. If you would invest  22,126  in Fabrinet on December 20, 2024 and sell it today you would earn a total of  326.00  from holding Fabrinet or generate 1.47% return on investment over 90 days.

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

Maris Tech  vs.  Fabrinet

Maris Tech

Risk-Adjusted Performance

Very Weak

Over the last 90 days Maris Tech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Fabrinet

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fabrinet are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Fabrinet may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Maris Tech and Fabrinet

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

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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.