Correlation Between Union Technologies and X Fab
Can any of the company-specific risk be diversified away by investing in both Union Technologies 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 Union Technologies and X Fab into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Union Technologies Informatique and X Fab Silicon, you can compare the effects of market volatilities on Union Technologies 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 Union Technologies with a short position of X Fab. Check out your portfolio center. Please also check ongoing floating volatility patterns of Union Technologies and X Fab.
Diversification Opportunities for Union Technologies and X Fab
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Union and XFAB is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Union Technologies Informatiqu 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 Union Technologies 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 Union Technologies Informatique 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 Union Technologies i.e., Union Technologies and X Fab go up and down completely randomly.
Pair Corralation between Union Technologies and X Fab
Assuming the 90 days trading horizon Union Technologies Informatique is expected to under-perform the X Fab. In addition to that, Union Technologies is 1.06 times more volatile than X Fab Silicon. It trades about -0.05 of its total potential returns per unit of risk. X Fab Silicon is currently generating about 0.21 per unit of volatility. If you would invest 440.00 in X Fab Silicon on September 13, 2024 and sell it today you would earn a total of 60.00 from holding X Fab Silicon or generate 13.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Union Technologies Informatiqu vs. X Fab Silicon
Performance |
| Timeline |
| Union Technologies |
| X Fab Silicon |
Union Technologies and X Fab Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Union Technologies and X Fab
The main advantage of trading using opposite Union Technologies and X Fab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Union Technologies 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.| Union Technologies vs. Linedata Services SA | Union Technologies vs. Lectra SA | Union Technologies vs. Manitou BF SA | Union Technologies vs. Ossiam Minimum Variance |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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