Correlation Between Hawkins and X FAB
Can any of the company-specific risk be diversified away by investing in both Hawkins 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 Hawkins and X FAB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hawkins and X FAB Silicon Foundries, you can compare the effects of market volatilities on Hawkins 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 Hawkins with a short position of X FAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hawkins and X FAB.
Diversification Opportunities for Hawkins and X FAB
Good diversification
The 3 months correlation between Hawkins and XFABF is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Hawkins 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 Hawkins 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 Hawkins 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 Hawkins i.e., Hawkins and X FAB go up and down completely randomly.
Pair Corralation between Hawkins and X FAB
Given the investment horizon of 90 days Hawkins is expected to generate 0.92 times more return on investment than X FAB. However, Hawkins is 1.08 times less risky than X FAB. It trades about 0.07 of its potential returns per unit of risk. X FAB Silicon Foundries is currently generating about -0.15 per unit of risk. If you would invest 12,196 in Hawkins on August 31, 2024 and sell it today you would earn a total of 1,143 from holding Hawkins or generate 9.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hawkins vs. X FAB Silicon Foundries
Performance |
| Timeline |
| Hawkins |
| X FAB Silicon |
Hawkins and X FAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hawkins and X FAB
The main advantage of trading using opposite Hawkins and X FAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hawkins 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.| Hawkins vs. H B Fuller | Hawkins vs. Minerals Technologies | Hawkins vs. Quaker Chemical | Hawkins vs. Oil Dri |
| X FAB vs. NVIDIA | X FAB vs. Intel | X FAB vs. Taiwan Semiconductor Manufacturing | X FAB vs. Marvell Technology Group |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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