Correlation Between X FAB and Semiconductor Manufacturing
Can any of the company-specific risk be diversified away by investing in both X FAB and Semiconductor Manufacturing 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 Semiconductor Manufacturing 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 Semiconductor Manufacturing International, you can compare the effects of market volatilities on X FAB and Semiconductor Manufacturing 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 Semiconductor Manufacturing. Check out your portfolio center. Please also check ongoing floating volatility patterns of X FAB and Semiconductor Manufacturing.
Diversification Opportunities for X FAB and Semiconductor Manufacturing
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between XFB and Semiconductor is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and Semiconductor Manufacturing In in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semiconductor Manufacturing 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 Semiconductor Manufacturing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semiconductor Manufacturing has no effect on the direction of X FAB i.e., X FAB and Semiconductor Manufacturing go up and down completely randomly.
Pair Corralation between X FAB and Semiconductor Manufacturing
If you would invest 500.00 in X FAB Silicon Foundries on October 11, 2024 and sell it today you would earn a total of 12.00 from holding X FAB Silicon Foundries or generate 2.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
X FAB Silicon Foundries vs. Semiconductor Manufacturing In
Performance |
| Timeline |
| X FAB Silicon |
| Semiconductor Manufacturing |
X FAB and Semiconductor Manufacturing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X FAB and Semiconductor Manufacturing
The main advantage of trading using opposite X FAB and Semiconductor Manufacturing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X FAB position performs unexpectedly, Semiconductor Manufacturing 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 Semiconductor Manufacturing will offset losses from the drop in Semiconductor Manufacturing's long position.| X FAB vs. Comba Telecom Systems | X FAB vs. PARKEN Sport Entertainment | X FAB vs. Tencent Music Entertainment | X FAB vs. Seven West Media |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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