Correlation Between Exmar NV and X Fab
Can any of the company-specific risk be diversified away by investing in both Exmar NV 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 Exmar NV and X Fab into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exmar NV and X Fab Silicon, you can compare the effects of market volatilities on Exmar NV 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 Exmar NV with a short position of X Fab. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exmar NV and X Fab.
Diversification Opportunities for Exmar NV and X Fab
Poor diversification
The 3 months correlation between Exmar and XFAB is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Exmar NV 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 Exmar NV 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 Exmar NV 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 Exmar NV i.e., Exmar NV and X Fab go up and down completely randomly.
Pair Corralation between Exmar NV and X Fab
Assuming the 90 days trading horizon Exmar NV is expected to generate 0.72 times more return on investment than X Fab. However, Exmar NV is 1.38 times less risky than X Fab. It trades about 0.05 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 746.00 in Exmar NV on August 29, 2024 and sell it today you would earn a total of 74.00 from holding Exmar NV or generate 9.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exmar NV vs. X Fab Silicon
Performance |
| Timeline |
| Exmar NV |
| X Fab Silicon |
Exmar NV and X Fab Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exmar NV and X Fab
The main advantage of trading using opposite Exmar NV and X Fab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exmar NV 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.| Exmar NV vs. EVS Broadcast Equipment | Exmar NV vs. NV Bekaert SA | Exmar NV vs. Tessenderlo | Exmar NV vs. Melexis NV |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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