Correlation Between Power Integrations and FormFactor
Can any of the company-specific risk be diversified away by investing in both Power Integrations 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 Power Integrations and FormFactor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Power Integrations and FormFactor, you can compare the effects of market volatilities on Power Integrations 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 Power Integrations with a short position of FormFactor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Power Integrations and FormFactor.
Diversification Opportunities for Power Integrations and FormFactor
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Power and FormFactor is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Power Integrations and FormFactor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FormFactor and Power Integrations 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 Power Integrations 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 Power Integrations i.e., Power Integrations and FormFactor go up and down completely randomly.
Pair Corralation between Power Integrations and FormFactor
Given the investment horizon of 90 days Power Integrations is expected to under-perform the FormFactor. In addition to that, Power Integrations is 1.08 times more volatile than FormFactor. It trades about -0.2 of its total potential returns per unit of risk. FormFactor is currently generating about 0.03 per unit of volatility. If you would invest 3,441 in FormFactor on April 30, 2025 and sell it today you would earn a total of 29.00 from holding FormFactor or generate 0.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Power Integrations vs. FormFactor
Performance |
| Timeline |
| Power Integrations |
| FormFactor |
Power Integrations and FormFactor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Power Integrations and FormFactor
The main advantage of trading using opposite Power Integrations and FormFactor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Power Integrations 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.| Power Integrations vs. Diodes Incorporated | Power Integrations vs. MACOM Technology Solutions | Power Integrations vs. Cirrus Logic | Power Integrations vs. Amkor Technology |
| FormFactor vs. QuickLogic | FormFactor vs. Sequans Communications SA | FormFactor vs. Power Integrations | FormFactor vs. Silicon Laboratories |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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