Correlation Between MeVis Medical and X-FAB Silicon
Can any of the company-specific risk be diversified away by investing in both MeVis Medical and X-FAB Silicon 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 MeVis Medical and X-FAB Silicon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MeVis Medical Solutions and X FAB Silicon Foundries, you can compare the effects of market volatilities on MeVis Medical and X-FAB Silicon 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 MeVis Medical with a short position of X-FAB Silicon. Check out your portfolio center. Please also check ongoing floating volatility patterns of MeVis Medical and X-FAB Silicon.
Diversification Opportunities for MeVis Medical and X-FAB Silicon
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MeVis and X-FAB is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding MeVis Medical Solutions 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 MeVis Medical 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 MeVis Medical Solutions are associated (or correlated) with X-FAB Silicon. 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 MeVis Medical i.e., MeVis Medical and X-FAB Silicon go up and down completely randomly.
Pair Corralation between MeVis Medical and X-FAB Silicon
Assuming the 90 days trading horizon MeVis Medical is expected to generate 56.37 times less return on investment than X-FAB Silicon. But when comparing it to its historical volatility, MeVis Medical Solutions is 3.22 times less risky than X-FAB Silicon. It trades about 0.0 of its potential returns per unit of risk. X FAB Silicon Foundries is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 424.00 in X FAB Silicon Foundries on August 31, 2024 and sell it today you would earn a total of 16.00 from holding X FAB Silicon Foundries or generate 3.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
MeVis Medical Solutions vs. X FAB Silicon Foundries
Performance |
| Timeline |
| MeVis Medical Solutions |
| X FAB Silicon |
MeVis Medical and X-FAB Silicon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MeVis Medical and X-FAB Silicon
The main advantage of trading using opposite MeVis Medical and X-FAB Silicon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MeVis Medical position performs unexpectedly, X-FAB Silicon 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 Silicon will offset losses from the drop in X-FAB Silicon's long position.| MeVis Medical vs. Apple Inc | MeVis Medical vs. Apple Inc | MeVis Medical vs. Apple Inc | MeVis Medical vs. Apple Inc |
| X-FAB Silicon vs. WILLIS LEASE FIN | X-FAB Silicon vs. Global Ship Lease | X-FAB Silicon vs. Lion One Metals | X-FAB Silicon vs. Cleanaway Waste Management |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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