Correlation Between X FAB and MIE HOLDINGS
Can any of the company-specific risk be diversified away by investing in both X FAB and MIE 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 and MIE 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 MIE HOLDINGS, you can compare the effects of market volatilities on X FAB and MIE 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 with a short position of MIE HOLDINGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of X FAB and MIE HOLDINGS.
Diversification Opportunities for X FAB and MIE HOLDINGS
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between XFB and MIE is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and MIE HOLDINGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MIE HOLDINGS 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 Foundries are associated (or correlated) with MIE HOLDINGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MIE HOLDINGS has no effect on the direction of X FAB i.e., X FAB and MIE HOLDINGS go up and down completely randomly.
Pair Corralation between X FAB and MIE HOLDINGS
If you would invest 488.00 in X FAB Silicon Foundries on October 24, 2024 and sell it today you would earn a total of 28.00 from holding X FAB Silicon Foundries or generate 5.74% 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 Foundries vs. MIE HOLDINGS
Performance |
| Timeline |
| X FAB Silicon |
| MIE HOLDINGS |
X FAB and MIE HOLDINGS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X FAB and MIE HOLDINGS
The main advantage of trading using opposite X FAB and MIE HOLDINGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X FAB position performs unexpectedly, MIE 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 MIE HOLDINGS will offset losses from the drop in MIE HOLDINGS's long position.| X FAB vs. NORTHEAST UTILITIES | X FAB vs. CHAMPION IRON | X FAB vs. Fukuyama Transporting Co | X FAB vs. Gaztransport Technigaz SA |
| MIE HOLDINGS vs. Summit Materials | MIE HOLDINGS vs. Goodyear Tire Rubber | MIE HOLDINGS vs. ASPEN TECHINC DL | MIE HOLDINGS vs. Mitsubishi Materials |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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