Correlation Between X Fab and Elior SCA
Can any of the company-specific risk be diversified away by investing in both X Fab and Elior SCA 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 Elior SCA 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 Elior SCA, you can compare the effects of market volatilities on X Fab and Elior SCA 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 Elior SCA. Check out your portfolio center. Please also check ongoing floating volatility patterns of X Fab and Elior SCA.
Diversification Opportunities for X Fab and Elior SCA
Significant diversification
The 3 months correlation between XFAB and Elior is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding X Fab Silicon and Elior SCA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elior SCA 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 Elior SCA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elior SCA has no effect on the direction of X Fab i.e., X Fab and Elior SCA go up and down completely randomly.
Pair Corralation between X Fab and Elior SCA
Assuming the 90 days trading horizon X Fab Silicon is expected to under-perform the Elior SCA. But the stock apears to be less risky and, when comparing its historical volatility, X Fab Silicon is 1.28 times less risky than Elior SCA. The stock trades about -0.09 of its potential returns per unit of risk. The Elior SCA is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 366.00 in Elior SCA on September 1, 2024 and sell it today you would lose (101.00) from holding Elior SCA or give up 27.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
X Fab Silicon vs. Elior SCA
Performance |
| Timeline |
| X Fab Silicon |
| Elior SCA |
X Fab and Elior SCA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X Fab and Elior SCA
The main advantage of trading using opposite X Fab and Elior SCA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X Fab position performs unexpectedly, Elior SCA 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 Elior SCA will offset losses from the drop in Elior SCA's long position.| X Fab vs. Chargeurs SA | X Fab vs. Straumann Holding AG | X Fab vs. Manitou BF SA | X Fab vs. Amundi Index Solutions |
| Elior SCA vs. Gaztransport Technigaz SAS | Elior SCA vs. Covivio Hotels | Elior SCA vs. Onlineformapro SA | Elior SCA vs. Broadpeak SA |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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