Correlation Between X FAB and PACIFIC ONLINE
Can any of the company-specific risk be diversified away by investing in both X FAB and PACIFIC 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 PACIFIC 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 PACIFIC ONLINE, you can compare the effects of market volatilities on X FAB and PACIFIC 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 PACIFIC ONLINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of X FAB and PACIFIC ONLINE.
Diversification Opportunities for X FAB and PACIFIC ONLINE
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between XFB and PACIFIC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and PACIFIC ONLINE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PACIFIC ONLINE 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 PACIFIC ONLINE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PACIFIC ONLINE has no effect on the direction of X FAB i.e., X FAB and PACIFIC ONLINE go up and down completely randomly.
Pair Corralation between X FAB and PACIFIC ONLINE
Assuming the 90 days trading horizon X FAB Silicon Foundries is expected to under-perform the PACIFIC ONLINE. In addition to that, X FAB is 1.09 times more volatile than PACIFIC ONLINE. It trades about -0.03 of its total potential returns per unit of risk. PACIFIC ONLINE is currently generating about 0.05 per unit of volatility. If you would invest 10.00 in PACIFIC ONLINE on October 16, 2024 and sell it today you would earn a total of 5.00 from holding PACIFIC ONLINE or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
X FAB Silicon Foundries vs. PACIFIC ONLINE
Performance |
| Timeline |
| X FAB Silicon |
| PACIFIC ONLINE |
X FAB and PACIFIC ONLINE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X FAB and PACIFIC ONLINE
The main advantage of trading using opposite X FAB and PACIFIC ONLINE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X FAB position performs unexpectedly, PACIFIC 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 PACIFIC ONLINE will offset losses from the drop in PACIFIC ONLINE's long position.| X FAB vs. CHRYSALIS INVESTMENTS LTD | X FAB vs. JLF INVESTMENT | X FAB vs. Playa Hotels Resorts | X FAB vs. Hyatt Hotels |
| PACIFIC ONLINE vs. X FAB Silicon Foundries | PACIFIC ONLINE vs. Q2M Managementberatung AG | PACIFIC ONLINE vs. UPDATE SOFTWARE | PACIFIC ONLINE vs. LANDSEA GREEN MANAGEMENT |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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