Correlation Between ANGANG STEEL and X FAB
Can any of the company-specific risk be diversified away by investing in both ANGANG STEEL 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 ANGANG STEEL and X FAB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANGANG STEEL H and X FAB Silicon Foundries, you can compare the effects of market volatilities on ANGANG STEEL 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 ANGANG STEEL with a short position of X FAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANGANG STEEL and X FAB.
Diversification Opportunities for ANGANG STEEL and X FAB
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ANGANG and XFB is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding ANGANG STEEL H 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 ANGANG STEEL 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 ANGANG STEEL H 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 ANGANG STEEL i.e., ANGANG STEEL and X FAB go up and down completely randomly.
Pair Corralation between ANGANG STEEL and X FAB
Assuming the 90 days trading horizon ANGANG STEEL H is expected to generate 1.44 times more return on investment than X FAB. However, ANGANG STEEL is 1.44 times more volatile than X FAB Silicon Foundries. It trades about 0.11 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 12.00 in ANGANG STEEL H on November 2, 2024 and sell it today you would earn a total of 6.00 from holding ANGANG STEEL H or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ANGANG STEEL H vs. X FAB Silicon Foundries
Performance |
| Timeline |
| ANGANG STEEL H |
| X FAB Silicon |
ANGANG STEEL and X FAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANGANG STEEL and X FAB
The main advantage of trading using opposite ANGANG STEEL and X FAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANGANG STEEL 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.| ANGANG STEEL vs. THORNEY TECHS LTD | ANGANG STEEL vs. Tradegate AG Wertpapierhandelsbank | ANGANG STEEL vs. GLG LIFE TECH | ANGANG STEEL vs. VELA TECHNOLPLC LS 0001 |
| X FAB vs. ATOSS SOFTWARE | X FAB vs. GBS Software AG | X FAB vs. Check Point Software | X FAB vs. OPKO HEALTH |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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