Correlation Between Fabrinet and NanoTech Gaming

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

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

Diversification Opportunities for Fabrinet and NanoTech Gaming

0.0

Correlation Coefficient

Fabrinet  NanoTech Gaming

Pay attention - limited upside

The 3 months correlation between Fabrinet and NanoTech is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Fabrinet and NanoTech Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NanoTech Gaming and Fabrinet 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 Fabrinet are associated (or correlated) with NanoTech Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NanoTech Gaming has no effect on the direction of Fabrinet i.e., Fabrinet and NanoTech Gaming go up and down completely randomly.

Pair Corralation between Fabrinet and NanoTech Gaming

If you would invest  18,883  in Fabrinet on March 7, 2024 and sell it today you would earn a total of  4,443  from holding Fabrinet or generate 23.53% return on investment over 90 days.

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

Fabrinet  vs.  NanoTech Gaming

Fabrinet

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fabrinet are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Fabrinet may actually be approaching a critical reversion point that can send shares even higher in July 2024.

NanoTech Gaming

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NanoTech Gaming has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, NanoTech Gaming is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Fabrinet and NanoTech Gaming

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

The idea behind Fabrinet and NanoTech Gaming 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.