Correlation Between X FAB and Ocean Harvest
Can any of the company-specific risk be diversified away by investing in both X FAB and Ocean Harvest 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 Ocean Harvest 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 Ocean Harvest Technology, you can compare the effects of market volatilities on X FAB and Ocean Harvest 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 Ocean Harvest. Check out your portfolio center. Please also check ongoing floating volatility patterns of X FAB and Ocean Harvest.
Diversification Opportunities for X FAB and Ocean Harvest
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 0ROZ and Ocean is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and Ocean Harvest Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ocean Harvest Technology 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 Ocean Harvest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ocean Harvest Technology has no effect on the direction of X FAB i.e., X FAB and Ocean Harvest go up and down completely randomly.
Pair Corralation between X FAB and Ocean Harvest
Assuming the 90 days trading horizon X FAB Silicon Foundries is expected to generate 1.7 times more return on investment than Ocean Harvest. However, X FAB is 1.7 times more volatile than Ocean Harvest Technology. It trades about 0.04 of its potential returns per unit of risk. Ocean Harvest Technology is currently generating about -0.09 per unit of risk. If you would invest 429.00 in X FAB Silicon Foundries on September 2, 2024 and sell it today you would earn a total of 7.00 from holding X FAB Silicon Foundries or generate 1.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
X FAB Silicon Foundries vs. Ocean Harvest Technology
Performance |
| Timeline |
| X FAB Silicon |
| Ocean Harvest Technology |
X FAB and Ocean Harvest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X FAB and Ocean Harvest
The main advantage of trading using opposite X FAB and Ocean Harvest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X FAB position performs unexpectedly, Ocean Harvest 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 Ocean Harvest will offset losses from the drop in Ocean Harvest'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 |
| Ocean Harvest vs. GoldMining | Ocean Harvest vs. Invesco Physical Silver | Ocean Harvest vs. Westlake Chemical Corp | Ocean Harvest vs. Games Workshop Group |
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 Directory module to find actively traded commodities issued by global exchanges.
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