Correlation Between Kronos Worldwide and X FAB
Can any of the company-specific risk be diversified away by investing in both Kronos Worldwide 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 Kronos Worldwide and X FAB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kronos Worldwide and X FAB Silicon Foundries, you can compare the effects of market volatilities on Kronos Worldwide 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 Kronos Worldwide with a short position of X FAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kronos Worldwide and X FAB.
Diversification Opportunities for Kronos Worldwide and X FAB
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kronos and XFB is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Kronos Worldwide 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 Kronos Worldwide 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 Kronos Worldwide 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 Kronos Worldwide i.e., Kronos Worldwide and X FAB go up and down completely randomly.
Pair Corralation between Kronos Worldwide and X FAB
Assuming the 90 days horizon Kronos Worldwide is expected to generate 0.97 times more return on investment than X FAB. However, Kronos Worldwide is 1.03 times less risky than X FAB. It trades about -0.05 of its potential returns per unit of risk. X FAB Silicon Foundries is currently generating about -0.06 per unit of risk. If you would invest 1,261 in Kronos Worldwide on September 13, 2024 and sell it today you would lose (277.00) from holding Kronos Worldwide or give up 21.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.22% |
| Values | Daily Returns |
Kronos Worldwide vs. X FAB Silicon Foundries
Performance |
| Timeline |
| Kronos Worldwide |
| X FAB Silicon |
Kronos Worldwide and X FAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kronos Worldwide and X FAB
The main advantage of trading using opposite Kronos Worldwide and X FAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kronos Worldwide 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.| Kronos Worldwide vs. X FAB Silicon Foundries | Kronos Worldwide vs. Soken Chemical Engineering | Kronos Worldwide vs. CosmoSteel Holdings Limited | Kronos Worldwide vs. AIR PRODCHEMICALS |
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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