Correlation Between X-FAB Silicon and Hawkins
Can any of the company-specific risk be diversified away by investing in both X-FAB Silicon and Hawkins 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 Hawkins 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 Hawkins, you can compare the effects of market volatilities on X-FAB Silicon and Hawkins 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 Hawkins. Check out your portfolio center. Please also check ongoing floating volatility patterns of X-FAB Silicon and Hawkins.
Diversification Opportunities for X-FAB Silicon and Hawkins
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between X-FAB and Hawkins is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and Hawkins in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawkins 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 Hawkins. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawkins has no effect on the direction of X-FAB Silicon i.e., X-FAB Silicon and Hawkins go up and down completely randomly.
Pair Corralation between X-FAB Silicon and Hawkins
Assuming the 90 days horizon X FAB Silicon Foundries is expected to under-perform the Hawkins. In addition to that, X-FAB Silicon is 1.4 times more volatile than Hawkins. It trades about -0.01 of its total potential returns per unit of risk. Hawkins is currently generating about 0.11 per unit of volatility. If you would invest 4,054 in Hawkins on August 27, 2024 and sell it today you would earn a total of 8,949 from holding Hawkins or generate 220.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
X FAB Silicon Foundries vs. Hawkins
Performance |
| Timeline |
| X FAB Silicon |
| Hawkins |
X-FAB Silicon and Hawkins Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X-FAB Silicon and Hawkins
The main advantage of trading using opposite X-FAB Silicon and Hawkins positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X-FAB Silicon position performs unexpectedly, Hawkins 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 Hawkins will offset losses from the drop in Hawkins' 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 |
| Hawkins vs. H B Fuller | Hawkins vs. Minerals Technologies | Hawkins vs. Quaker Chemical | Hawkins vs. Oil Dri |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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