Correlation Between X FAB and Axis Bank
Can any of the company-specific risk be diversified away by investing in both X FAB and Axis Bank 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 Axis Bank 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 Axis Bank Ltd, you can compare the effects of market volatilities on X FAB and Axis Bank 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 Axis Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of X FAB and Axis Bank.
Diversification Opportunities for X FAB and Axis Bank
Weak diversification
The 3 months correlation between 0ROZ and Axis is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and Axis Bank Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axis Bank 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 Axis Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axis Bank has no effect on the direction of X FAB i.e., X FAB and Axis Bank go up and down completely randomly.
Pair Corralation between X FAB and Axis Bank
Assuming the 90 days trading horizon X FAB Silicon Foundries is expected to under-perform the Axis Bank. In addition to that, X FAB is 1.57 times more volatile than Axis Bank Ltd. It trades about -0.12 of its total potential returns per unit of risk. Axis Bank Ltd is currently generating about 0.01 per unit of volatility. If you would invest 6,766 in Axis Bank Ltd on September 2, 2024 and sell it today you would lose (66.00) from holding Axis Bank Ltd or give up 0.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.81% |
| Values | Daily Returns |
X FAB Silicon Foundries vs. Axis Bank Ltd
Performance |
| Timeline |
| X FAB Silicon |
| Axis Bank |
X FAB and Axis Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X FAB and Axis Bank
The main advantage of trading using opposite X FAB and Axis Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X FAB position performs unexpectedly, Axis Bank 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 Axis Bank will offset losses from the drop in Axis Bank's long position.| X FAB vs. Uniper SE | X FAB vs. Mulberry Group PLC | X FAB vs. London Security Plc | X FAB vs. Triad Group PLC |
| Axis Bank vs. SupplyMe Capital PLC | Axis Bank vs. Lloyds Banking Group | Axis Bank vs. Premier African Minerals | Axis Bank vs. SANTANDER UK 8 |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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