Correlation Between X FAB and Mercedes Benz
Can any of the company-specific risk be diversified away by investing in both X FAB and Mercedes Benz 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 Mercedes Benz 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 Mercedes Benz Group AG, you can compare the effects of market volatilities on X FAB and Mercedes Benz 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 Mercedes Benz. Check out your portfolio center. Please also check ongoing floating volatility patterns of X FAB and Mercedes Benz.
Diversification Opportunities for X FAB and Mercedes Benz
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between XFB and Mercedes is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and Mercedes Benz Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mercedes Benz 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 Mercedes Benz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mercedes Benz Group has no effect on the direction of X FAB i.e., X FAB and Mercedes Benz go up and down completely randomly.
Pair Corralation between X FAB and Mercedes Benz
Assuming the 90 days trading horizon X FAB Silicon Foundries is expected to under-perform the Mercedes Benz. In addition to that, X FAB is 2.13 times more volatile than Mercedes Benz Group AG. It trades about -0.07 of its total potential returns per unit of risk. Mercedes Benz Group AG is currently generating about 0.34 per unit of volatility. If you would invest 5,401 in Mercedes Benz Group AG on November 6, 2024 and sell it today you would earn a total of 497.00 from holding Mercedes Benz Group AG or generate 9.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
X FAB Silicon Foundries vs. Mercedes Benz Group AG
Performance |
| Timeline |
| X FAB Silicon |
| Mercedes Benz Group |
X FAB and Mercedes Benz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X FAB and Mercedes Benz
The main advantage of trading using opposite X FAB and Mercedes Benz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X FAB position performs unexpectedly, Mercedes Benz 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 Mercedes Benz will offset losses from the drop in Mercedes Benz'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 |
| Mercedes Benz vs. TFS FINANCIAL | Mercedes Benz vs. JSC Halyk bank | Mercedes Benz vs. MAVEN WIRELESS SWEDEN | Mercedes Benz vs. BANK OF CHINA |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |