Correlation Between X FAB and ZhongAn Online
Can any of the company-specific risk be diversified away by investing in both X FAB and ZhongAn Online 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 ZhongAn Online 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 ZhongAn Online P, you can compare the effects of market volatilities on X FAB and ZhongAn Online 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 ZhongAn Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of X FAB and ZhongAn Online.
Diversification Opportunities for X FAB and ZhongAn Online
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between XFB and ZhongAn is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and ZhongAn Online P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZhongAn Online P 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 ZhongAn Online. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZhongAn Online P has no effect on the direction of X FAB i.e., X FAB and ZhongAn Online go up and down completely randomly.
Pair Corralation between X FAB and ZhongAn Online
Assuming the 90 days trading horizon X FAB Silicon Foundries is expected to under-perform the ZhongAn Online. In addition to that, X FAB is 1.18 times more volatile than ZhongAn Online P. It trades about -0.02 of its total potential returns per unit of risk. ZhongAn Online P is currently generating about 0.27 per unit of volatility. If you would invest 134.00 in ZhongAn Online P on November 7, 2024 and sell it today you would earn a total of 19.00 from holding ZhongAn Online P or generate 14.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
X FAB Silicon Foundries vs. ZhongAn Online P
Performance |
| Timeline |
| X FAB Silicon |
| ZhongAn Online P |
X FAB and ZhongAn Online Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X FAB and ZhongAn Online
The main advantage of trading using opposite X FAB and ZhongAn Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X FAB position performs unexpectedly, ZhongAn Online 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 ZhongAn Online will offset losses from the drop in ZhongAn Online's long position.| X FAB vs. New China Life | X FAB vs. SBI Insurance Group | X FAB vs. Daito Trust Construction | X FAB vs. VIENNA INSURANCE GR |
| ZhongAn Online vs. UNIVMUSIC GRPADR050 | ZhongAn Online vs. PENN Entertainment | ZhongAn Online vs. De Grey Mining | ZhongAn Online vs. TOWNSQUARE MEDIA INC |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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