Correlation Between X-FAB Silicon and Stora Enso
Can any of the company-specific risk be diversified away by investing in both X-FAB Silicon and Stora Enso 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 Silicon and Stora Enso 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 Stora Enso Oyj, you can compare the effects of market volatilities on X-FAB Silicon and Stora Enso 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 Silicon with a short position of Stora Enso. Check out your portfolio center. Please also check ongoing floating volatility patterns of X-FAB Silicon and Stora Enso.
Diversification Opportunities for X-FAB Silicon and Stora Enso
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between X-FAB and Stora is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and Stora Enso Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stora Enso Oyj and X-FAB Silicon 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 Stora Enso. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stora Enso Oyj has no effect on the direction of X-FAB Silicon i.e., X-FAB Silicon and Stora Enso go up and down completely randomly.
Pair Corralation between X-FAB Silicon and Stora Enso
Assuming the 90 days trading horizon X FAB Silicon Foundries is expected to generate 1.22 times more return on investment than Stora Enso. However, X-FAB Silicon is 1.22 times more volatile than Stora Enso Oyj. It trades about -0.02 of its potential returns per unit of risk. Stora Enso Oyj is currently generating about -0.03 per unit of risk. If you would invest 660.00 in X FAB Silicon Foundries on September 2, 2024 and sell it today you would lose (210.00) from holding X FAB Silicon Foundries or give up 31.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
X FAB Silicon Foundries vs. Stora Enso Oyj
Performance |
| Timeline |
| X FAB Silicon |
| Stora Enso Oyj |
X-FAB Silicon and Stora Enso Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X-FAB Silicon and Stora Enso
The main advantage of trading using opposite X-FAB Silicon and Stora Enso positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X-FAB Silicon position performs unexpectedly, Stora Enso 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 Stora Enso will offset losses from the drop in Stora Enso's long position.| X-FAB Silicon vs. Apple Inc | X-FAB Silicon vs. Apple Inc | X-FAB Silicon vs. Apple Inc | X-FAB Silicon vs. Apple Inc |
| Stora Enso vs. DXC Technology Co | Stora Enso vs. ONWARD MEDICAL BV | Stora Enso vs. X FAB Silicon Foundries | Stora Enso vs. Wayside Technology Group |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |