Correlation Between Agape ATP and FormFactor

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

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

Diversification Opportunities for Agape ATP and FormFactor

0.55

Correlation Coefficient

Agape ATP  FormFactor

Very weak diversification

The 3 months correlation between Agape and FormFactor is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Agape ATP and FormFactor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FormFactor and Agape ATP 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 Agape ATP 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 Agape ATP i.e., Agape ATP and FormFactor go up and down completely randomly.

Pair Corralation between Agape ATP and FormFactor

Given the investment horizon of 90 days Agape ATP is expected to generate 26.35 times more return on investment than FormFactor. However, Agape ATP is 26.35 times more volatile than FormFactor. It trades about 0.07 of its potential returns per unit of risk. FormFactor is currently generating about 0.06 per unit of risk. If you would invest  8,020  in Agape ATP on September 5, 2024 and sell it today you would lose (7,864) from holding Agape ATP or give up 98.05% of portfolio value over 90 days.

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

Agape ATP  vs.  FormFactor

Agape ATP

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Agape ATP has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Agape ATP is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

FormFactor

Risk-Adjusted Performance

0 of 100

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 very healthy basic indicators, FormFactor is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Agape ATP and FormFactor

The main advantage of trading using opposite Agape ATP and FormFactor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agape ATP 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 Agape ATP 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.