Correlation Between X FAB and Summit Hotel
Can any of the company-specific risk be diversified away by investing in both X FAB and Summit Hotel 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 Summit Hotel 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 Summit Hotel Properties, you can compare the effects of market volatilities on X FAB and Summit Hotel 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 Summit Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of X FAB and Summit Hotel.
Diversification Opportunities for X FAB and Summit Hotel
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between XFB and Summit is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and Summit Hotel Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Hotel Properties 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 Summit Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Hotel Properties has no effect on the direction of X FAB i.e., X FAB and Summit Hotel go up and down completely randomly.
Pair Corralation between X FAB and Summit Hotel
Assuming the 90 days trading horizon X FAB Silicon Foundries is expected to under-perform the Summit Hotel. In addition to that, X FAB is 1.22 times more volatile than Summit Hotel Properties. It trades about -0.02 of its total potential returns per unit of risk. Summit Hotel Properties is currently generating about 0.01 per unit of volatility. If you would invest 658.00 in Summit Hotel Properties on October 13, 2024 and sell it today you would lose (33.00) from holding Summit Hotel Properties or give up 5.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
X FAB Silicon Foundries vs. Summit Hotel Properties
Performance |
| Timeline |
| X FAB Silicon |
| Summit Hotel Properties |
X FAB and Summit Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X FAB and Summit Hotel
The main advantage of trading using opposite X FAB and Summit Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X FAB position performs unexpectedly, Summit Hotel 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 Summit Hotel will offset losses from the drop in Summit Hotel's long position.| X FAB vs. Pembina Pipeline Corp | X FAB vs. IMAGIN MEDICAL INC | X FAB vs. CREO MEDICAL GRP | X FAB vs. ENVVENO MEDICAL DL 00001 |
| Summit Hotel vs. AOYAMA TRADING | Summit Hotel vs. X FAB Silicon Foundries | Summit Hotel vs. Alfa Financial Software | Summit Hotel vs. MEDCAW INVESTMENTS LS 01 |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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