Correlation Between FANDIFI TECHNOLOGY and X FAB
Can any of the company-specific risk be diversified away by investing in both FANDIFI TECHNOLOGY 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 FANDIFI TECHNOLOGY and X FAB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FANDIFI TECHNOLOGY P and X FAB Silicon Foundries, you can compare the effects of market volatilities on FANDIFI TECHNOLOGY 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 FANDIFI TECHNOLOGY with a short position of X FAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of FANDIFI TECHNOLOGY and X FAB.
Diversification Opportunities for FANDIFI TECHNOLOGY and X FAB
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between FANDIFI and XFB is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding FANDIFI TECHNOLOGY P 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 FANDIFI TECHNOLOGY 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 FANDIFI TECHNOLOGY P 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 FANDIFI TECHNOLOGY i.e., FANDIFI TECHNOLOGY and X FAB go up and down completely randomly.
Pair Corralation between FANDIFI TECHNOLOGY and X FAB
Assuming the 90 days horizon FANDIFI TECHNOLOGY P is expected to generate 10.11 times more return on investment than X FAB. However, FANDIFI TECHNOLOGY is 10.11 times more volatile than X FAB Silicon Foundries. It trades about 0.04 of its potential returns per unit of risk. X FAB Silicon Foundries is currently generating about -0.04 per unit of risk. If you would invest 3.00 in FANDIFI TECHNOLOGY P on November 30, 2024 and sell it today you would lose (2.95) from holding FANDIFI TECHNOLOGY P or give up 98.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
FANDIFI TECHNOLOGY P vs. X FAB Silicon Foundries
Performance |
| Timeline |
| FANDIFI TECHNOLOGY |
| X FAB Silicon |
FANDIFI TECHNOLOGY and X FAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FANDIFI TECHNOLOGY and X FAB
The main advantage of trading using opposite FANDIFI TECHNOLOGY and X FAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FANDIFI TECHNOLOGY 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.| FANDIFI TECHNOLOGY vs. Magnachip Semiconductor | FANDIFI TECHNOLOGY vs. Alfa Financial Software | FANDIFI TECHNOLOGY vs. Nordic Semiconductor ASA | FANDIFI TECHNOLOGY vs. MagnaChip Semiconductor Corp |
| X FAB vs. Aristocrat Leisure Limited | X FAB vs. Columbia Sportswear | X FAB vs. Playa Hotels Resorts | X FAB vs. Federal Agricultural Mortgage |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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