Correlation Between X FAB and VIVA WINE
Can any of the company-specific risk be diversified away by investing in both X FAB and VIVA WINE 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 VIVA WINE 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 VIVA WINE GROUP, you can compare the effects of market volatilities on X FAB and VIVA WINE 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 VIVA WINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of X FAB and VIVA WINE.
Diversification Opportunities for X FAB and VIVA WINE
Excellent diversification
The 3 months correlation between XFB and VIVA is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and VIVA WINE GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VIVA WINE GROUP 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 VIVA WINE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VIVA WINE GROUP has no effect on the direction of X FAB i.e., X FAB and VIVA WINE go up and down completely randomly.
Pair Corralation between X FAB and VIVA WINE
Assuming the 90 days trading horizon X FAB Silicon Foundries is expected to under-perform the VIVA WINE. In addition to that, X FAB is 1.84 times more volatile than VIVA WINE GROUP. It trades about -0.07 of its total potential returns per unit of risk. VIVA WINE GROUP is currently generating about 0.02 per unit of volatility. If you would invest 336.00 in VIVA WINE GROUP on November 6, 2024 and sell it today you would earn a total of 1.00 from holding VIVA WINE GROUP or generate 0.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
X FAB Silicon Foundries vs. VIVA WINE GROUP
Performance |
| Timeline |
| X FAB Silicon |
| VIVA WINE GROUP |
X FAB and VIVA WINE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X FAB and VIVA WINE
The main advantage of trading using opposite X FAB and VIVA WINE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X FAB position performs unexpectedly, VIVA WINE 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 VIVA WINE will offset losses from the drop in VIVA WINE's long position.| X FAB vs. MOLSON RS BEVERAGE | X FAB vs. CAL MAINE FOODS | X FAB vs. GBS Software AG | X FAB vs. Magic Software Enterprises |
| VIVA WINE vs. INFORMATION SVC GRP | VIVA WINE vs. OPKO HEALTH | VIVA WINE vs. CARDINAL HEALTH | VIVA WINE vs. Cardinal Health |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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