Correlation Between X FAB and Advanced Medical
Can any of the company-specific risk be diversified away by investing in both X FAB and Advanced Medical 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 X FAB and Advanced Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between X FAB Silicon Foundries and Advanced Medical Solutions, you can compare the effects of market volatilities on X FAB and Advanced Medical 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 X FAB with a short position of Advanced Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of X FAB and Advanced Medical.
Diversification Opportunities for X FAB and Advanced Medical
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between 0ROZ and Advanced is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and Advanced Medical Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Medical Sol and X FAB 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 X FAB Silicon Foundries are associated (or correlated) with Advanced Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Medical Sol has no effect on the direction of X FAB i.e., X FAB and Advanced Medical go up and down completely randomly.
Pair Corralation between X FAB and Advanced Medical
Assuming the 90 days trading horizon X FAB Silicon Foundries is expected to under-perform the Advanced Medical. But the stock apears to be less risky and, when comparing its historical volatility, X FAB Silicon Foundries is 1.08 times less risky than Advanced Medical. The stock trades about -0.06 of its potential returns per unit of risk. The Advanced Medical Solutions is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 23,403 in Advanced Medical Solutions on August 30, 2024 and sell it today you would lose (2,153) from holding Advanced Medical Solutions or give up 9.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.51% |
| Values | Daily Returns |
X FAB Silicon Foundries vs. Advanced Medical Solutions
Performance |
| Timeline |
| X FAB Silicon |
| Advanced Medical Sol |
X FAB and Advanced Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X FAB and Advanced Medical
The main advantage of trading using opposite X FAB and Advanced Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X FAB position performs unexpectedly, Advanced Medical 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 Advanced Medical will offset losses from the drop in Advanced Medical's long position.| X FAB vs. Lendinvest PLC | X FAB vs. Neometals | X FAB vs. Albion Technology General | X FAB vs. Jupiter Fund Management |
| Advanced Medical vs. Samsung Electronics Co | Advanced Medical vs. Samsung Electronics Co | Advanced Medical vs. Hyundai Motor | Advanced Medical vs. Toyota Motor Corp |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |