Correlation Between X FAB and PEH WERTPAPIER
Can any of the company-specific risk be diversified away by investing in both X FAB and PEH WERTPAPIER 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 PEH WERTPAPIER 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 PEH WERTPAPIER, you can compare the effects of market volatilities on X FAB and PEH WERTPAPIER 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 PEH WERTPAPIER. Check out your portfolio center. Please also check ongoing floating volatility patterns of X FAB and PEH WERTPAPIER.
Diversification Opportunities for X FAB and PEH WERTPAPIER
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between XFB and PEH is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and PEH WERTPAPIER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PEH WERTPAPIER 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 PEH WERTPAPIER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PEH WERTPAPIER has no effect on the direction of X FAB i.e., X FAB and PEH WERTPAPIER go up and down completely randomly.
Pair Corralation between X FAB and PEH WERTPAPIER
Assuming the 90 days trading horizon X FAB Silicon Foundries is expected to generate 1.69 times more return on investment than PEH WERTPAPIER. However, X FAB is 1.69 times more volatile than PEH WERTPAPIER. It trades about 0.21 of its potential returns per unit of risk. PEH WERTPAPIER is currently generating about 0.14 per unit of risk. If you would invest 439.00 in X FAB Silicon Foundries on September 15, 2024 and sell it today you would earn a total of 58.00 from holding X FAB Silicon Foundries or generate 13.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
X FAB Silicon Foundries vs. PEH WERTPAPIER
Performance |
| Timeline |
| X FAB Silicon |
| PEH WERTPAPIER |
X FAB and PEH WERTPAPIER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X FAB and PEH WERTPAPIER
The main advantage of trading using opposite X FAB and PEH WERTPAPIER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X FAB position performs unexpectedly, PEH WERTPAPIER 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 PEH WERTPAPIER will offset losses from the drop in PEH WERTPAPIER's long position.The idea behind X FAB Silicon Foundries and PEH WERTPAPIER 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.| PEH WERTPAPIER vs. Siamgas And Petrochemicals | PEH WERTPAPIER vs. Consolidated Communications Holdings | PEH WERTPAPIER vs. X FAB Silicon Foundries | PEH WERTPAPIER vs. Quaker Chemical |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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