Correlation Between X FAB and AfriTin Mining
Can any of the company-specific risk be diversified away by investing in both X FAB and AfriTin Mining 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 AfriTin Mining 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 AfriTin Mining, you can compare the effects of market volatilities on X FAB and AfriTin Mining 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 AfriTin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of X FAB and AfriTin Mining.
Diversification Opportunities for X FAB and AfriTin Mining
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 0ROZ and AfriTin is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and AfriTin Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AfriTin Mining 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 AfriTin Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AfriTin Mining has no effect on the direction of X FAB i.e., X FAB and AfriTin Mining go up and down completely randomly.
Pair Corralation between X FAB and AfriTin Mining
Assuming the 90 days trading horizon X FAB Silicon Foundries is expected to under-perform the AfriTin Mining. But the stock apears to be less risky and, when comparing its historical volatility, X FAB Silicon Foundries is 1.51 times less risky than AfriTin Mining. The stock trades about -0.03 of its potential returns per unit of risk. The AfriTin Mining is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 455.00 in AfriTin Mining on September 4, 2024 and sell it today you would lose (169.00) from holding AfriTin Mining or give up 37.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.42% |
| Values | Daily Returns |
X FAB Silicon Foundries vs. AfriTin Mining
Performance |
| Timeline |
| X FAB Silicon |
| AfriTin Mining |
X FAB and AfriTin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X FAB and AfriTin Mining
The main advantage of trading using opposite X FAB and AfriTin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X FAB position performs unexpectedly, AfriTin Mining 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 AfriTin Mining will offset losses from the drop in AfriTin Mining's long position.| X FAB vs. Samsung Electronics Co | X FAB vs. Samsung Electronics Co | X FAB vs. Hyundai Motor | X FAB vs. Toyota Motor Corp |
| AfriTin Mining vs. Antofagasta PLC | AfriTin Mining vs. Atalaya Mining | AfriTin Mining vs. Ferrexpo PLC | AfriTin Mining vs. Amaroq Minerals |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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