Correlation Between X FAB and International Business
Can any of the company-specific risk be diversified away by investing in both X FAB and International Business 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 International Business 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 International Business Machines, you can compare the effects of market volatilities on X FAB and International Business 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 International Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of X FAB and International Business.
Diversification Opportunities for X FAB and International Business
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between XFB and International is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and International Business Machine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Business 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 International Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Business has no effect on the direction of X FAB i.e., X FAB and International Business go up and down completely randomly.
Pair Corralation between X FAB and International Business
Assuming the 90 days trading horizon X FAB Silicon Foundries is expected to under-perform the International Business. In addition to that, X FAB is 2.08 times more volatile than International Business Machines. It trades about -0.04 of its total potential returns per unit of risk. International Business Machines is currently generating about 0.16 per unit of volatility. If you would invest 15,477 in International Business Machines on October 13, 2024 and sell it today you would earn a total of 5,918 from holding International Business Machines or generate 38.24% 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. International Business Machine
Performance |
| Timeline |
| X FAB Silicon |
| International Business |
X FAB and International Business Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X FAB and International Business
The main advantage of trading using opposite X FAB and International Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X FAB position performs unexpectedly, International Business 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 International Business will offset losses from the drop in International Business' long position.| X FAB vs. Zijin Mining Group | X FAB vs. Forsys Metals Corp | X FAB vs. ScanSource | X FAB vs. Perseus Mining Limited |
| International Business vs. Align Technology | International Business vs. Vishay Intertechnology | International Business vs. X FAB Silicon Foundries | International Business vs. Cleanaway Waste Management |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| CEOs Directory Screen CEOs from public companies around the world |