Correlation Between Eoptolink Technology and Fabrinet

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

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

Diversification Opportunities for Eoptolink Technology and Fabrinet

0.66

Correlation Coefficient

Eoptolink Technology  Fabrinet

Poor diversification

The 3 months correlation between Eoptolink and Fabrinet is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Eoptolink Technology and Fabrinet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fabrinet and Eoptolink Technology 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 Eoptolink Technology 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 Eoptolink Technology i.e., Eoptolink Technology and Fabrinet go up and down completely randomly.

Pair Corralation between Eoptolink Technology and Fabrinet

Assuming the 90 days trading horizon Eoptolink Technology is expected to generate 1.56 times more return on investment than Fabrinet. However, Eoptolink Technology is 1.56 times more volatile than Fabrinet. It trades about 0.11 of its potential returns per unit of risk. Fabrinet is currently generating about 0.11 per unit of risk. If you would invest  24,429  in Eoptolink Technology on August 16, 2025 and sell it today you would earn a total of  8,156  from holding Eoptolink Technology or generate 33.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	92.06%
Values	Daily Returns

Eoptolink Technology  vs.  Fabrinet

Eoptolink Technology

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Eoptolink Technology are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Eoptolink Technology sustained solid returns over the last few months and may actually be approaching a breakup point.

Fabrinet

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Fabrinet are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Fabrinet displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Eoptolink Technology and Fabrinet

The main advantage of trading using opposite Eoptolink Technology and Fabrinet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eoptolink Technology 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 Eoptolink Technology 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.