Correlation Between AIR PRODCHEMICALS and X-FAB Silicon
Can any of the company-specific risk be diversified away by investing in both AIR PRODCHEMICALS 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 AIR PRODCHEMICALS 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 AIR PRODCHEMICALS and X FAB Silicon Foundries, you can compare the effects of market volatilities on AIR PRODCHEMICALS 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 AIR PRODCHEMICALS with a short position of X-FAB Silicon. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIR PRODCHEMICALS and X-FAB Silicon.
Diversification Opportunities for AIR PRODCHEMICALS and X-FAB Silicon
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AIR and X-FAB is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding AIR PRODCHEMICALS 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 AIR PRODCHEMICALS 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 AIR PRODCHEMICALS 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 AIR PRODCHEMICALS i.e., AIR PRODCHEMICALS and X-FAB Silicon go up and down completely randomly.
Pair Corralation between AIR PRODCHEMICALS and X-FAB Silicon
Assuming the 90 days trading horizon AIR PRODCHEMICALS is expected to under-perform the X-FAB Silicon. But the stock apears to be less risky and, when comparing its historical volatility, AIR PRODCHEMICALS is 3.45 times less risky than X-FAB Silicon. The stock trades about -0.52 of its potential returns per unit of risk. The X FAB Silicon Foundries is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 495.00 in X FAB Silicon Foundries on October 14, 2024 and sell it today you would earn a total of 17.00 from holding X FAB Silicon Foundries or generate 3.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AIR PRODCHEMICALS vs. X FAB Silicon Foundries
Performance |
| Timeline |
| AIR PRODCHEMICALS |
| X FAB Silicon |
AIR PRODCHEMICALS and X-FAB Silicon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIR PRODCHEMICALS and X-FAB Silicon
The main advantage of trading using opposite AIR PRODCHEMICALS and X-FAB Silicon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIR PRODCHEMICALS 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.| AIR PRODCHEMICALS vs. Coffee Holding Co | AIR PRODCHEMICALS vs. Scandinavian Tobacco Group | AIR PRODCHEMICALS vs. BRIT AMER TOBACCO | AIR PRODCHEMICALS vs. KOBE STEEL LTD |
| X-FAB Silicon vs. AIR PRODCHEMICALS | X-FAB Silicon vs. Liberty Broadband | X-FAB Silicon vs. Tencent Music Entertainment | X-FAB Silicon vs. China Eastern Airlines |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |