Correlation Between X FAB and Fukuyama Transporting
Can any of the company-specific risk be diversified away by investing in both X FAB and Fukuyama Transporting 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 Fukuyama Transporting 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 Fukuyama Transporting Co, you can compare the effects of market volatilities on X FAB and Fukuyama Transporting 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 Fukuyama Transporting. Check out your portfolio center. Please also check ongoing floating volatility patterns of X FAB and Fukuyama Transporting.
Diversification Opportunities for X FAB and Fukuyama Transporting
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between XFB and Fukuyama is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and Fukuyama Transporting Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fukuyama Transporting 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 Fukuyama Transporting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fukuyama Transporting has no effect on the direction of X FAB i.e., X FAB and Fukuyama Transporting go up and down completely randomly.
Pair Corralation between X FAB and Fukuyama Transporting
Assuming the 90 days trading horizon X FAB Silicon Foundries is expected to generate 0.84 times more return on investment than Fukuyama Transporting. However, X FAB Silicon Foundries is 1.19 times less risky than Fukuyama Transporting. It trades about 0.17 of its potential returns per unit of risk. Fukuyama Transporting Co is currently generating about 0.04 per unit of risk. If you would invest 415.00 in X FAB Silicon Foundries on September 3, 2024 and sell it today you would earn a total of 35.00 from holding X FAB Silicon Foundries or generate 8.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
X FAB Silicon Foundries vs. Fukuyama Transporting Co
Performance |
| Timeline |
| X FAB Silicon |
| Fukuyama Transporting |
X FAB and Fukuyama Transporting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X FAB and Fukuyama Transporting
The main advantage of trading using opposite X FAB and Fukuyama Transporting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X FAB position performs unexpectedly, Fukuyama Transporting 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 Fukuyama Transporting will offset losses from the drop in Fukuyama Transporting's long position.The idea behind X FAB Silicon Foundries and Fukuyama Transporting Co 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.| Fukuyama Transporting vs. Direct Line Insurance | Fukuyama Transporting vs. T MOBILE INCDL 00001 | Fukuyama Transporting vs. REVO INSURANCE SPA | Fukuyama Transporting vs. COMBA TELECOM SYST |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |