Correlation Between X FAB and FIRST SAVINGS
Can any of the company-specific risk be diversified away by investing in both X FAB and FIRST SAVINGS 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 FIRST SAVINGS 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 FIRST SAVINGS FINL, you can compare the effects of market volatilities on X FAB and FIRST SAVINGS 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 FIRST SAVINGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of X FAB and FIRST SAVINGS.
Diversification Opportunities for X FAB and FIRST SAVINGS
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between XFB and FIRST is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and FIRST SAVINGS FINL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIRST SAVINGS FINL 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 FIRST SAVINGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIRST SAVINGS FINL has no effect on the direction of X FAB i.e., X FAB and FIRST SAVINGS go up and down completely randomly.
Pair Corralation between X FAB and FIRST SAVINGS
Assuming the 90 days trading horizon X FAB Silicon Foundries is expected to generate 1.18 times more return on investment than FIRST SAVINGS. However, X FAB is 1.18 times more volatile than FIRST SAVINGS FINL. It trades about -0.14 of its potential returns per unit of risk. FIRST SAVINGS FINL is currently generating about -0.25 per unit of risk. If you would invest 495.00 in X FAB Silicon Foundries on November 9, 2024 and sell it today you would lose (38.00) from holding X FAB Silicon Foundries or give up 7.68% of portfolio value 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. FIRST SAVINGS FINL
Performance |
| Timeline |
| X FAB Silicon |
| FIRST SAVINGS FINL |
X FAB and FIRST SAVINGS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X FAB and FIRST SAVINGS
The main advantage of trading using opposite X FAB and FIRST SAVINGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X FAB position performs unexpectedly, FIRST SAVINGS 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 FIRST SAVINGS will offset losses from the drop in FIRST SAVINGS's long position.| X FAB vs. Salesforce | X FAB vs. YATRA ONLINE DL 0001 | X FAB vs. Ares Management Corp | X FAB vs. MUTUIONLINE |
| FIRST SAVINGS vs. SWISS WATER DECAFFCOFFEE | FIRST SAVINGS vs. CAIRN HOMES EO | FIRST SAVINGS vs. BOSTON BEER A | FIRST SAVINGS vs. Focus Home Interactive |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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