Correlation Between Advanced Micro and FormFactor

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

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Can any of the company-specific risk be diversified away by investing in both Advanced Micro and FormFactor at the same time? Although using correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combing Advanced Micro and FormFactor into the same portfolio which is an essential part of fundamental portfolio management process.

Diversification Opportunities for Advanced Micro and FormFactor

0.84
Correlation
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Very poor diversification

The 3 months correlation between Advanced and FormFactor is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Micro Devices Inc and FormFactor Inc in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on FormFactor and Advanced Micro 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 Advanced Micro Devices 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 Advanced Micro i.e. Advanced Micro and FormFactor go up and down completely randomly.

Pair Corralation between Advanced Micro and FormFactor

Considering 30-days investment horizon, Advanced Micro is expected to generate 1.36 times less return on investment than FormFactor. But when comparing it to its historical volatility, Advanced Micro Devices is 1.18 times less risky than FormFactor. It trades about 0.09 of its potential returns per unit of risk. FormFactor is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  2,076  in FormFactor on May 7, 2020 and sell it today you would earn a total of  655.00  from holding FormFactor or generate 31.55% return on investment over 30 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Advanced Micro Devices Inc  vs.  FormFactor Inc

 Performance (%) 
      Timeline 
Advanced Micro Devices 
66

Advanced Micro Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Advanced Micro Devices are ranked lower than 6 (%) of all global equities and portfolios over the last 30 days. In spite of rather sluggish fundamental drivers, Advanced Micro exhibited solid returns over the last few months and may actually be approaching a breakup point.
FormFactor 
77

FormFactor Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in FormFactor are ranked lower than 7 (%) of all global equities and portfolios over the last 30 days. Even with considerably unsteady technical indicators, FormFactor revealed solid returns over the last few months and may actually be approaching a breakup point.

Advanced Micro and FormFactor Volatility Contrast

 Predicted Return Density 
      Returns 
Check out your portfolio center. Please also try Price Ceiling Movement module to calculate and plot price ceiling movement for different equity instruments.


 
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