Correlation Between CynergisTek and FormFactor

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

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

Diversification Opportunities for CynergisTek and FormFactor

0.48

Correlation Coefficient

CynergisTek  FormFactor

Very weak diversification

The 3 months correlation between CynergisTek and FormFactor is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding CynergisTek and FormFactor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FormFactor and CynergisTek 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 CynergisTek 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 CynergisTek i.e., CynergisTek and FormFactor go up and down completely randomly.

Pair Corralation between CynergisTek and FormFactor

If you would invest  4,181  in FormFactor on February 22, 2024 and sell it today you would earn a total of  1,648  from holding FormFactor or generate 39.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.56%
Values	Daily Returns

CynergisTek  vs.  FormFactor

CynergisTek

Risk-Adjusted Performance

0 of 100

Very Weak

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

FormFactor

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in FormFactor are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, FormFactor displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CynergisTek and FormFactor

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

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.