Correlation Between X-FAB Silicon and Celsius Holdings
Can any of the company-specific risk be diversified away by investing in both X-FAB Silicon and Celsius Holdings 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 Silicon and Celsius Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between X FAB Silicon Foundries and Celsius Holdings, you can compare the effects of market volatilities on X-FAB Silicon and Celsius Holdings 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 Silicon with a short position of Celsius Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of X-FAB Silicon and Celsius Holdings.
Diversification Opportunities for X-FAB Silicon and Celsius Holdings
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between X-FAB and Celsius is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and Celsius Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celsius Holdings and X-FAB Silicon 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 Foundries are associated (or correlated) with Celsius Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celsius Holdings has no effect on the direction of X-FAB Silicon i.e., X-FAB Silicon and Celsius Holdings go up and down completely randomly.
Pair Corralation between X-FAB Silicon and Celsius Holdings
Assuming the 90 days horizon X FAB Silicon Foundries is expected to under-perform the Celsius Holdings. But the pink sheet apears to be less risky and, when comparing its historical volatility, X FAB Silicon Foundries is 1.43 times less risky than Celsius Holdings. The pink sheet trades about -0.11 of its potential returns per unit of risk. The Celsius Holdings is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 5,060 in Celsius Holdings on August 25, 2024 and sell it today you would lose (2,129) from holding Celsius Holdings or give up 42.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
X FAB Silicon Foundries vs. Celsius Holdings
Performance |
| Timeline |
| X FAB Silicon |
| Celsius Holdings |
X-FAB Silicon and Celsius Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X-FAB Silicon and Celsius Holdings
The main advantage of trading using opposite X-FAB Silicon and Celsius Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X-FAB Silicon position performs unexpectedly, Celsius Holdings 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 Celsius Holdings will offset losses from the drop in Celsius Holdings' long position.| X-FAB Silicon vs. NVIDIA | X-FAB Silicon vs. Intel | X-FAB Silicon vs. Taiwan Semiconductor Manufacturing | X-FAB Silicon vs. Marvell Technology Group |
| Celsius Holdings vs. Vita Coco | Celsius Holdings vs. Keurig Dr Pepper | Celsius Holdings vs. PepsiCo | Celsius Holdings vs. Coca Cola Femsa SAB |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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