Correlation Between Firan Technology and X-FAB Silicon
Can any of the company-specific risk be diversified away by investing in both Firan Technology and X-FAB Silicon 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 Firan Technology and X-FAB Silicon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Firan Technology Group and X FAB Silicon Foundries, you can compare the effects of market volatilities on Firan Technology and X-FAB Silicon 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 Firan Technology with a short position of X-FAB Silicon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firan Technology and X-FAB Silicon.
Diversification Opportunities for Firan Technology and X-FAB Silicon
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Firan and X-FAB is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Firan Technology Group and X FAB Silicon Foundries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X FAB Silicon and Firan Technology 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 Firan Technology Group are associated (or correlated) with X-FAB Silicon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X FAB Silicon has no effect on the direction of Firan Technology i.e., Firan Technology and X-FAB Silicon go up and down completely randomly.
Pair Corralation between Firan Technology and X-FAB Silicon
Assuming the 90 days trading horizon Firan Technology Group is expected to generate 0.54 times more return on investment than X-FAB Silicon. However, Firan Technology Group is 1.85 times less risky than X-FAB Silicon. It trades about -0.07 of its potential returns per unit of risk. X FAB Silicon Foundries is currently generating about -0.04 per unit of risk. If you would invest 490.00 in Firan Technology Group on October 11, 2024 and sell it today you would lose (8.00) from holding Firan Technology Group or give up 1.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Firan Technology Group vs. X FAB Silicon Foundries
Performance |
| Timeline |
| Firan Technology |
| X FAB Silicon |
Firan Technology and X-FAB Silicon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Firan Technology and X-FAB Silicon
The main advantage of trading using opposite Firan Technology and X-FAB Silicon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firan Technology position performs unexpectedly, X-FAB Silicon 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 X-FAB Silicon will offset losses from the drop in X-FAB Silicon's long position.| Firan Technology vs. Major Drilling Group | Firan Technology vs. WisdomTree Investments | Firan Technology vs. ECHO INVESTMENT ZY | Firan Technology vs. NorAm Drilling AS |
| X-FAB Silicon vs. THAI BEVERAGE | X-FAB Silicon vs. Thai Beverage Public | X-FAB Silicon vs. INDOFOOD AGRI RES | X-FAB Silicon vs. CN MODERN DAIRY |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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