Correlation Between Chargeurs and X Fab
Can any of the company-specific risk be diversified away by investing in both Chargeurs 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 Chargeurs and X Fab into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chargeurs SA and X Fab Silicon, you can compare the effects of market volatilities on Chargeurs 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 Chargeurs with a short position of X Fab. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chargeurs and X Fab.
Diversification Opportunities for Chargeurs and X Fab
Poor diversification
The 3 months correlation between Chargeurs and XFAB is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Chargeurs SA 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 Chargeurs 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 Chargeurs SA 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 Chargeurs i.e., Chargeurs and X Fab go up and down completely randomly.
Pair Corralation between Chargeurs and X Fab
Assuming the 90 days trading horizon Chargeurs SA is expected to generate 1.1 times more return on investment than X Fab. However, Chargeurs is 1.1 times more volatile than X Fab Silicon. It trades about -0.01 of its potential returns per unit of risk. X Fab Silicon is currently generating about -0.02 per unit of risk. If you would invest 1,253 in Chargeurs SA on September 3, 2024 and sell it today you would lose (273.00) from holding Chargeurs SA or give up 21.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chargeurs SA vs. X Fab Silicon
Performance |
| Timeline |
| Chargeurs SA |
| X Fab Silicon |
Chargeurs and X Fab Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chargeurs and X Fab
The main advantage of trading using opposite Chargeurs and X Fab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chargeurs 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.| Chargeurs vs. Derichebourg | Chargeurs vs. Trigano SA | Chargeurs vs. Rubis SCA | Chargeurs vs. BigBen Interactive |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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