Correlation Between X Fab and Poxel SA
Can any of the company-specific risk be diversified away by investing in both X Fab and Poxel SA 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 Poxel SA 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 Poxel SA, you can compare the effects of market volatilities on X Fab and Poxel SA 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 Poxel SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of X Fab and Poxel SA.
Diversification Opportunities for X Fab and Poxel SA
Modest diversification
The 3 months correlation between XFAB and Poxel is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding X Fab Silicon and Poxel SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Poxel SA 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 Poxel SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Poxel SA has no effect on the direction of X Fab i.e., X Fab and Poxel SA go up and down completely randomly.
Pair Corralation between X Fab and Poxel SA
Assuming the 90 days trading horizon X Fab Silicon is expected to under-perform the Poxel SA. But the stock apears to be less risky and, when comparing its historical volatility, X Fab Silicon is 4.28 times less risky than Poxel SA. The stock trades about -0.01 of its potential returns per unit of risk. The Poxel SA is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 15.00 in Poxel SA on October 9, 2024 and sell it today you would earn a total of 6.00 from holding Poxel SA or generate 40.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
X Fab Silicon vs. Poxel SA
Performance |
| Timeline |
| X Fab Silicon |
| Poxel SA |
X Fab and Poxel SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X Fab and Poxel SA
The main advantage of trading using opposite X Fab and Poxel SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X Fab position performs unexpectedly, Poxel SA 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 Poxel SA will offset losses from the drop in Poxel SA's long position.The idea behind X Fab Silicon and Poxel SA 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.| Poxel SA vs. Gaztransport Technigaz SAS | Poxel SA vs. Eutelsat Communications SA | Poxel SA vs. Fiducial Office Solutions | Poxel SA vs. Technip Energies BV |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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