Correlation Between X FAB and Concurrent Technologies
Can any of the company-specific risk be diversified away by investing in both X FAB and Concurrent Technologies 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 Concurrent Technologies 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 Concurrent Technologies Plc, you can compare the effects of market volatilities on X FAB and Concurrent Technologies 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 Concurrent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of X FAB and Concurrent Technologies.
Diversification Opportunities for X FAB and Concurrent Technologies
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 0ROZ and Concurrent is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and Concurrent Technologies Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concurrent Technologies 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 Concurrent Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Concurrent Technologies has no effect on the direction of X FAB i.e., X FAB and Concurrent Technologies go up and down completely randomly.
Pair Corralation between X FAB and Concurrent Technologies
Assuming the 90 days trading horizon X FAB Silicon Foundries is expected to under-perform the Concurrent Technologies. In addition to that, X FAB is 1.07 times more volatile than Concurrent Technologies Plc. It trades about -0.11 of its total potential returns per unit of risk. Concurrent Technologies Plc is currently generating about 0.12 per unit of volatility. If you would invest 10,102 in Concurrent Technologies Plc on September 1, 2024 and sell it today you would earn a total of 4,298 from holding Concurrent Technologies Plc or generate 42.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.23% |
| Values | Daily Returns |
X FAB Silicon Foundries vs. Concurrent Technologies Plc
Performance |
| Timeline |
| X FAB Silicon |
| Concurrent Technologies |
X FAB and Concurrent Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X FAB and Concurrent Technologies
The main advantage of trading using opposite X FAB and Concurrent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X FAB position performs unexpectedly, Concurrent Technologies 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 Concurrent Technologies will offset losses from the drop in Concurrent Technologies' long position.| X FAB vs. Gamma Communications PLC | X FAB vs. Dalata Hotel Group | X FAB vs. Zegona Communications Plc | X FAB vs. Gaztransport et Technigaz |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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