Correlation Between X Fab and TME Pharma
Can any of the company-specific risk be diversified away by investing in both X Fab and TME Pharma 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 X Fab and TME Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between X Fab Silicon and TME Pharma NV, you can compare the effects of market volatilities on X Fab and TME Pharma 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 X Fab with a short position of TME Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of X Fab and TME Pharma.
Diversification Opportunities for X Fab and TME Pharma
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between XFAB and TME is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding X Fab Silicon and TME Pharma NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TME Pharma NV and X Fab 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 X Fab Silicon are associated (or correlated) with TME Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TME Pharma NV has no effect on the direction of X Fab i.e., X Fab and TME Pharma go up and down completely randomly.
Pair Corralation between X Fab and TME Pharma
Assuming the 90 days trading horizon X Fab Silicon is expected to generate 0.33 times more return on investment than TME Pharma. However, X Fab Silicon is 3.02 times less risky than TME Pharma. It trades about -0.02 of its potential returns per unit of risk. TME Pharma NV is currently generating about -0.02 per unit of risk. If you would invest 679.00 in X Fab Silicon on September 3, 2024 and sell it today you would lose (229.00) from holding X Fab Silicon or give up 33.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
X Fab Silicon vs. TME Pharma NV
Performance |
| Timeline |
| X Fab Silicon |
| TME Pharma NV |
X Fab and TME Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X Fab and TME Pharma
The main advantage of trading using opposite X Fab and TME Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X Fab position performs unexpectedly, TME Pharma 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 TME Pharma will offset losses from the drop in TME Pharma's long position.The idea behind X Fab Silicon and TME Pharma NV pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| TME Pharma vs. Guandao Puer Investment | TME Pharma vs. Boiron SA | TME Pharma vs. Jacquet Metal Service | TME Pharma vs. Reworld Media |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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