Correlation Between X FAB and Corsair Gaming
Can any of the company-specific risk be diversified away by investing in both X FAB and Corsair Gaming 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 Corsair Gaming 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 Corsair Gaming, you can compare the effects of market volatilities on X FAB and Corsair Gaming 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 Corsair Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of X FAB and Corsair Gaming.
Diversification Opportunities for X FAB and Corsair Gaming
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between XFB and Corsair is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and Corsair Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corsair Gaming 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 Corsair Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corsair Gaming has no effect on the direction of X FAB i.e., X FAB and Corsair Gaming go up and down completely randomly.
Pair Corralation between X FAB and Corsair Gaming
Assuming the 90 days trading horizon X FAB Silicon Foundries is expected to under-perform the Corsair Gaming. But the stock apears to be less risky and, when comparing its historical volatility, X FAB Silicon Foundries is 1.78 times less risky than Corsair Gaming. The stock trades about -0.13 of its potential returns per unit of risk. The Corsair Gaming is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 627.00 in Corsair Gaming on August 29, 2024 and sell it today you would earn a total of 81.00 from holding Corsair Gaming or generate 12.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.67% |
| Values | Daily Returns |
X FAB Silicon Foundries vs. Corsair Gaming
Performance |
| Timeline |
| X FAB Silicon |
| Corsair Gaming |
X FAB and Corsair Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X FAB and Corsair Gaming
The main advantage of trading using opposite X FAB and Corsair Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X FAB position performs unexpectedly, Corsair Gaming 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 Corsair Gaming will offset losses from the drop in Corsair Gaming's long position.The idea behind X FAB Silicon Foundries and Corsair Gaming pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Corsair Gaming vs. EEDUCATION ALBERT AB | Corsair Gaming vs. Computer And Technologies | Corsair Gaming vs. PKSHA TECHNOLOGY INC | Corsair Gaming vs. X FAB Silicon Foundries |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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