Correlation Between Beeks Trading and X FAB
Can any of the company-specific risk be diversified away by investing in both Beeks Trading 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 Beeks Trading and X FAB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beeks Trading and X FAB Silicon Foundries, you can compare the effects of market volatilities on Beeks Trading 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 Beeks Trading with a short position of X FAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beeks Trading and X FAB.
Diversification Opportunities for Beeks Trading and X FAB
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Beeks and 0ROZ is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Beeks Trading 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 Beeks Trading 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 Beeks Trading 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 Beeks Trading i.e., Beeks Trading and X FAB go up and down completely randomly.
Pair Corralation between Beeks Trading and X FAB
Assuming the 90 days trading horizon Beeks Trading is expected to generate 1.27 times more return on investment than X FAB. However, Beeks Trading is 1.27 times more volatile than X FAB Silicon Foundries. It trades about 0.06 of its potential returns per unit of risk. X FAB Silicon Foundries is currently generating about -0.03 per unit of risk. If you would invest 14,600 in Beeks Trading on September 3, 2024 and sell it today you would earn a total of 12,400 from holding Beeks Trading or generate 84.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.42% |
| Values | Daily Returns |
Beeks Trading vs. X FAB Silicon Foundries
Performance |
| Timeline |
| Beeks Trading |
| X FAB Silicon |
Beeks Trading and X FAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beeks Trading and X FAB
The main advantage of trading using opposite Beeks Trading and X FAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beeks Trading 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.| Beeks Trading vs. United Utilities Group | Beeks Trading vs. Tyson Foods Cl | Beeks Trading vs. Supermarket Income REIT | Beeks Trading vs. Fortune Brands Home |
| X FAB vs. Smithson Investment Trust | X FAB vs. DXC Technology Co | X FAB vs. Lowland Investment Co | X FAB vs. The Investment |
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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