Correlation Between X Fab and Soditech
Can any of the company-specific risk be diversified away by investing in both X Fab and Soditech 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 Soditech 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 Soditech SA, you can compare the effects of market volatilities on X Fab and Soditech 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 Soditech. Check out your portfolio center. Please also check ongoing floating volatility patterns of X Fab and Soditech.
Diversification Opportunities for X Fab and Soditech
Good diversification
The 3 months correlation between XFAB and Soditech is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding X Fab Silicon and Soditech SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Soditech 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 Soditech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Soditech SA has no effect on the direction of X Fab i.e., X Fab and Soditech go up and down completely randomly.
Pair Corralation between X Fab and Soditech
Assuming the 90 days trading horizon X Fab Silicon is expected to generate 8.53 times more return on investment than Soditech. However, X Fab is 8.53 times more volatile than Soditech SA. It trades about 0.12 of its potential returns per unit of risk. Soditech SA is currently generating about -0.29 per unit of risk. If you would invest 463.00 in X Fab Silicon on September 12, 2024 and sell it today you would earn a total of 37.00 from holding X Fab Silicon or generate 7.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
X Fab Silicon vs. Soditech SA
Performance |
| Timeline |
| X Fab Silicon |
| Soditech SA |
X Fab and Soditech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X Fab and Soditech
The main advantage of trading using opposite X Fab and Soditech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X Fab position performs unexpectedly, Soditech 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 Soditech will offset losses from the drop in Soditech's long position.| X Fab vs. Groupe Guillin SA | X Fab vs. Stef SA | X Fab vs. SA Catana Group | X Fab vs. Jacquet Metal Service |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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