Correlation Between X Fab and Ontex Group
Can any of the company-specific risk be diversified away by investing in both X Fab and Ontex Group 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 Ontex Group 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 Ontex Group NV, you can compare the effects of market volatilities on X Fab and Ontex Group 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 Ontex Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of X Fab and Ontex Group.
Diversification Opportunities for X Fab and Ontex Group
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between XFAB and Ontex is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding X Fab Silicon and Ontex Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ontex Group 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 Ontex Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ontex Group NV has no effect on the direction of X Fab i.e., X Fab and Ontex Group go up and down completely randomly.
Pair Corralation between X Fab and Ontex Group
Assuming the 90 days trading horizon X Fab Silicon is expected to under-perform the Ontex Group. In addition to that, X Fab is 1.5 times more volatile than Ontex Group NV. It trades about -0.03 of its total potential returns per unit of risk. Ontex Group NV is currently generating about 0.03 per unit of volatility. 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 |
X Fab Silicon vs. Ontex Group NV
Performance |
| Timeline |
| X Fab Silicon |
| Ontex Group NV |
X Fab and Ontex Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X Fab and Ontex Group
The main advantage of trading using opposite X Fab and Ontex Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X Fab position performs unexpectedly, Ontex Group 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 Ontex Group will offset losses from the drop in Ontex Group's long position.The idea behind X Fab Silicon and Ontex Group 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.| 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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