Correlation Between American Public and X Fab
Can any of the company-specific risk be diversified away by investing in both American Public and X Fab 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 American Public and X Fab into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Public Education and X Fab Silicon, you can compare the effects of market volatilities on American Public and X Fab 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 American Public with a short position of X Fab. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Public and X Fab.
Diversification Opportunities for American Public and X Fab
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and XFB is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding American Public Education and X Fab Silicon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X Fab Silicon and American Public 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 American Public Education are associated (or correlated) with X Fab. 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 American Public i.e., American Public and X Fab go up and down completely randomly.
Pair Corralation between American Public and X Fab
Assuming the 90 days horizon American Public Education is expected to generate 1.67 times more return on investment than X Fab. However, American Public is 1.67 times more volatile than X Fab Silicon. It trades about 0.11 of its potential returns per unit of risk. X Fab Silicon is currently generating about -0.11 per unit of risk. If you would invest 760.00 in American Public Education on September 11, 2024 and sell it today you would earn a total of 1,210 from holding American Public Education or generate 159.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Public Education vs. X Fab Silicon
Performance |
| Timeline |
| American Public Education |
| X Fab Silicon |
American Public and X Fab Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Public and X Fab
The main advantage of trading using opposite American Public and X Fab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Public position performs unexpectedly, X Fab 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 will offset losses from the drop in X Fab's long position.| American Public vs. IDP EDUCATION LTD | American Public vs. Laureate Education | American Public vs. Superior Plus Corp | American Public vs. Origin Agritech |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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