Correlation Between X Fab and Itissalat
Can any of the company-specific risk be diversified away by investing in both X Fab and Itissalat 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 Itissalat 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 Itissalat Al Maghrib, you can compare the effects of market volatilities on X Fab and Itissalat 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 Itissalat. Check out your portfolio center. Please also check ongoing floating volatility patterns of X Fab and Itissalat.
Diversification Opportunities for X Fab and Itissalat
Significant diversification
The 3 months correlation between XFAB and Itissalat is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding X Fab Silicon and Itissalat Al Maghrib in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itissalat Al Maghrib 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 Itissalat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itissalat Al Maghrib has no effect on the direction of X Fab i.e., X Fab and Itissalat go up and down completely randomly.
Pair Corralation between X Fab and Itissalat
Assuming the 90 days trading horizon X Fab Silicon is expected to under-perform the Itissalat. In addition to that, X Fab is 4.07 times more volatile than Itissalat Al Maghrib. It trades about -0.25 of its total potential returns per unit of risk. Itissalat Al Maghrib is currently generating about -0.16 per unit of volatility. If you would invest 825.00 in Itissalat Al Maghrib on August 24, 2024 and sell it today you would lose (25.00) from holding Itissalat Al Maghrib or give up 3.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
X Fab Silicon vs. Itissalat Al Maghrib
Performance |
| Timeline |
| X Fab Silicon |
| Itissalat Al Maghrib |
X Fab and Itissalat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X Fab and Itissalat
The main advantage of trading using opposite X Fab and Itissalat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X Fab position performs unexpectedly, Itissalat 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 Itissalat will offset losses from the drop in Itissalat's long position.The idea behind X Fab Silicon and Itissalat Al Maghrib 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.| Itissalat vs. Infotel SA | Itissalat vs. IT Link | Itissalat vs. Bourse Direct SA | Itissalat vs. Aubay 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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