Correlation Between ALERION CLEANPOWER and X FAB
Can any of the company-specific risk be diversified away by investing in both ALERION CLEANPOWER 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 ALERION CLEANPOWER and X FAB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ALERION CLEANPOWER and X FAB Silicon Foundries, you can compare the effects of market volatilities on ALERION CLEANPOWER 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 ALERION CLEANPOWER with a short position of X FAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALERION CLEANPOWER and X FAB.
Diversification Opportunities for ALERION CLEANPOWER and X FAB
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between ALERION and XFB is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding ALERION CLEANPOWER 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 ALERION CLEANPOWER 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 ALERION CLEANPOWER 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 ALERION CLEANPOWER i.e., ALERION CLEANPOWER and X FAB go up and down completely randomly.
Pair Corralation between ALERION CLEANPOWER and X FAB
Assuming the 90 days trading horizon ALERION CLEANPOWER is expected to generate 0.8 times more return on investment than X FAB. However, ALERION CLEANPOWER is 1.25 times less risky than X FAB. It trades about 0.06 of its potential returns per unit of risk. X FAB Silicon Foundries is currently generating about 0.01 per unit of risk. If you would invest 1,616 in ALERION CLEANPOWER on September 12, 2024 and sell it today you would earn a total of 132.00 from holding ALERION CLEANPOWER or generate 8.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ALERION CLEANPOWER vs. X FAB Silicon Foundries
Performance |
| Timeline |
| ALERION CLEANPOWER |
| X FAB Silicon |
ALERION CLEANPOWER and X FAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ALERION CLEANPOWER and X FAB
The main advantage of trading using opposite ALERION CLEANPOWER and X FAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALERION CLEANPOWER 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.| ALERION CLEANPOWER vs. USWE SPORTS AB | ALERION CLEANPOWER vs. ARISTOCRAT LEISURE | ALERION CLEANPOWER vs. RCM TECHNOLOGIES | ALERION CLEANPOWER vs. ACCSYS TECHPLC EO |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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