Correlation Between WIMFARM SA and X FAB
Can any of the company-specific risk be diversified away by investing in both WIMFARM SA 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 WIMFARM SA and X FAB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WIMFARM SA EO and X FAB Silicon Foundries, you can compare the effects of market volatilities on WIMFARM SA 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 WIMFARM SA with a short position of X FAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of WIMFARM SA and X FAB.
Diversification Opportunities for WIMFARM SA and X FAB
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between WIMFARM and XFB is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding WIMFARM SA EO 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 WIMFARM SA 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 WIMFARM SA EO 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 WIMFARM SA i.e., WIMFARM SA and X FAB go up and down completely randomly.
Pair Corralation between WIMFARM SA and X FAB
Assuming the 90 days horizon WIMFARM SA EO is expected to generate 1.66 times more return on investment than X FAB. However, WIMFARM SA is 1.66 times more volatile than X FAB Silicon Foundries. It trades about 0.1 of its potential returns per unit of risk. X FAB Silicon Foundries is currently generating about 0.13 per unit of risk. If you would invest 322.00 in WIMFARM SA EO on October 26, 2024 and sell it today you would earn a total of 54.00 from holding WIMFARM SA EO or generate 16.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WIMFARM SA EO vs. X FAB Silicon Foundries
Performance |
| Timeline |
| WIMFARM SA EO |
| X FAB Silicon |
WIMFARM SA and X FAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WIMFARM SA and X FAB
The main advantage of trading using opposite WIMFARM SA and X FAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WIMFARM SA 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.| WIMFARM SA vs. Air Transport Services | WIMFARM SA vs. EVS Broadcast Equipment | WIMFARM SA vs. Datadog | WIMFARM SA vs. DATADOT TECHNOLOGY |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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