Correlation Between X FAB and PKSHA TECHNOLOGY
Can any of the company-specific risk be diversified away by investing in both X FAB and PKSHA TECHNOLOGY 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 PKSHA TECHNOLOGY 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 PKSHA TECHNOLOGY INC, you can compare the effects of market volatilities on X FAB and PKSHA TECHNOLOGY 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 PKSHA TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of X FAB and PKSHA TECHNOLOGY.
Diversification Opportunities for X FAB and PKSHA TECHNOLOGY
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between XFB and PKSHA is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and PKSHA TECHNOLOGY INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PKSHA TECHNOLOGY INC 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 PKSHA TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PKSHA TECHNOLOGY INC has no effect on the direction of X FAB i.e., X FAB and PKSHA TECHNOLOGY go up and down completely randomly.
Pair Corralation between X FAB and PKSHA TECHNOLOGY
Assuming the 90 days trading horizon X FAB Silicon Foundries is expected to under-perform the PKSHA TECHNOLOGY. In addition to that, X FAB is 1.16 times more volatile than PKSHA TECHNOLOGY INC. It trades about -0.21 of its total potential returns per unit of risk. PKSHA TECHNOLOGY INC is currently generating about 0.06 per unit of volatility. If you would invest 2,100 in PKSHA TECHNOLOGY INC on August 25, 2024 and sell it today you would earn a total of 60.00 from holding PKSHA TECHNOLOGY INC or generate 2.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
X FAB Silicon Foundries vs. PKSHA TECHNOLOGY INC
Performance |
| Timeline |
| X FAB Silicon |
| PKSHA TECHNOLOGY INC |
X FAB and PKSHA TECHNOLOGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X FAB and PKSHA TECHNOLOGY
The main advantage of trading using opposite X FAB and PKSHA TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X FAB position performs unexpectedly, PKSHA TECHNOLOGY 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 PKSHA TECHNOLOGY will offset losses from the drop in PKSHA TECHNOLOGY's long position.| X FAB vs. Boiron SA | X FAB vs. ON SEMICONDUCTOR | X FAB vs. Tianjin Capital Environmental | X FAB vs. Insteel Industries |
| PKSHA TECHNOLOGY vs. Microsoft | PKSHA TECHNOLOGY vs. Adobe Inc | PKSHA TECHNOLOGY vs. ADYEN NV UNSPADR001 |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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