Correlation Between Impulse Fitness and X Fab
Can any of the company-specific risk be diversified away by investing in both Impulse Fitness 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 Impulse Fitness and X Fab into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Impulse Fitness Solutions and X Fab Silicon, you can compare the effects of market volatilities on Impulse Fitness 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 Impulse Fitness with a short position of X Fab. Check out your portfolio center. Please also check ongoing floating volatility patterns of Impulse Fitness and X Fab.
Diversification Opportunities for Impulse Fitness and X Fab
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Impulse and XFAB is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Impulse Fitness Solutions 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 Impulse Fitness 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 Impulse Fitness Solutions 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 Impulse Fitness i.e., Impulse Fitness and X Fab go up and down completely randomly.
Pair Corralation between Impulse Fitness and X Fab
Assuming the 90 days trading horizon Impulse Fitness Solutions is expected to under-perform the X Fab. But the stock apears to be less risky and, when comparing its historical volatility, Impulse Fitness Solutions is 1.05 times less risky than X Fab. The stock trades about -0.14 of its potential returns per unit of risk. The X Fab Silicon is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 661.00 in X Fab Silicon on August 29, 2024 and sell it today you would lose (237.00) from holding X Fab Silicon or give up 35.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Impulse Fitness Solutions vs. X Fab Silicon
Performance |
| Timeline |
| Impulse Fitness Solutions |
| X Fab Silicon |
Impulse Fitness and X Fab Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Impulse Fitness and X Fab
The main advantage of trading using opposite Impulse Fitness and X Fab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Impulse Fitness 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.| Impulse Fitness vs. Trigano SA | Impulse Fitness vs. Bnteau SA | Impulse Fitness vs. Voyageurs du Monde | Impulse Fitness vs. SA Catana 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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