Correlation Between Ontex Group and X Fab
Can any of the company-specific risk be diversified away by investing in both Ontex Group 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 Ontex Group and X Fab into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ontex Group NV and X Fab Silicon, you can compare the effects of market volatilities on Ontex Group 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 Ontex Group with a short position of X Fab. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ontex Group and X Fab.
Diversification Opportunities for Ontex Group and X Fab
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ontex and XFAB is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Ontex Group NV 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 Ontex Group 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 Ontex Group NV 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 Ontex Group i.e., Ontex Group and X Fab go up and down completely randomly.
Pair Corralation between Ontex Group and X Fab
Assuming the 90 days trading horizon Ontex Group NV is expected to generate 0.67 times more return on investment than X Fab. However, Ontex Group NV is 1.5 times less risky than X Fab. It trades about 0.03 of its potential returns per unit of risk. X Fab Silicon is currently generating about -0.03 per unit of risk. If you would invest 649.00 in Ontex Group NV on August 26, 2024 and sell it today you would earn a total of 115.00 from holding Ontex Group NV or generate 17.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ontex Group NV vs. X Fab Silicon
Performance |
| Timeline |
| Ontex Group NV |
| X Fab Silicon |
Ontex Group and X Fab Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ontex Group and X Fab
The main advantage of trading using opposite Ontex Group and X Fab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ontex Group 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.| Ontex Group vs. Brederode SA | Ontex Group vs. Compagnie du Bois | Ontex Group vs. Ackermans Van Haaren | Ontex Group vs. Sofina Socit Anonyme |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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