Correlation Between X FAB and Bankers Investment
Can any of the company-specific risk be diversified away by investing in both X FAB and Bankers Investment 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 Bankers Investment 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 Bankers Investment Trust, you can compare the effects of market volatilities on X FAB and Bankers Investment 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 Bankers Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of X FAB and Bankers Investment.
Diversification Opportunities for X FAB and Bankers Investment
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 0ROZ and Bankers is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and Bankers Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bankers Investment Trust 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 Bankers Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bankers Investment Trust has no effect on the direction of X FAB i.e., X FAB and Bankers Investment go up and down completely randomly.
Pair Corralation between X FAB and Bankers Investment
Assuming the 90 days trading horizon X FAB Silicon Foundries is expected to under-perform the Bankers Investment. In addition to that, X FAB is 4.83 times more volatile than Bankers Investment Trust. It trades about -0.08 of its total potential returns per unit of risk. Bankers Investment Trust is currently generating about 0.28 per unit of volatility. If you would invest 11,200 in Bankers Investment Trust on August 28, 2024 and sell it today you would earn a total of 380.00 from holding Bankers Investment Trust or generate 3.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
X FAB Silicon Foundries vs. Bankers Investment Trust
Performance |
| Timeline |
| X FAB Silicon |
| Bankers Investment Trust |
X FAB and Bankers Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X FAB and Bankers Investment
The main advantage of trading using opposite X FAB and Bankers Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X FAB position performs unexpectedly, Bankers Investment 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 Bankers Investment will offset losses from the drop in Bankers Investment's long position.| X FAB vs. Zoom Video Communications | X FAB vs. Tata Steel Limited | X FAB vs. LPKF Laser Electronics | X FAB vs. Batm Advanced Communications |
| Bankers Investment vs. Sunny Optical Technology | Bankers Investment vs. Albion Technology General | Bankers Investment vs. Check Point Software | Bankers Investment vs. Bisichi Mining PLC |
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 Stocks Directory module to find actively traded stocks across global markets.
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