Correlation Between X FAB and Sinopec Shanghai
Can any of the company-specific risk be diversified away by investing in both X FAB and Sinopec Shanghai 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 Sinopec Shanghai 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 Sinopec Shanghai Petrochemical, you can compare the effects of market volatilities on X FAB and Sinopec Shanghai 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 Sinopec Shanghai. Check out your portfolio center. Please also check ongoing floating volatility patterns of X FAB and Sinopec Shanghai.
Diversification Opportunities for X FAB and Sinopec Shanghai
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between XFB and Sinopec is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and Sinopec Shanghai Petrochemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinopec Shanghai Pet 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 Sinopec Shanghai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinopec Shanghai Pet has no effect on the direction of X FAB i.e., X FAB and Sinopec Shanghai go up and down completely randomly.
Pair Corralation between X FAB and Sinopec Shanghai
Assuming the 90 days trading horizon X FAB Silicon Foundries is expected to generate 0.69 times more return on investment than Sinopec Shanghai. However, X FAB Silicon Foundries is 1.45 times less risky than Sinopec Shanghai. It trades about 0.06 of its potential returns per unit of risk. Sinopec Shanghai Petrochemical is currently generating about 0.02 per unit of risk. 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 Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
X FAB Silicon Foundries vs. Sinopec Shanghai Petrochemical
Performance |
| Timeline |
| X FAB Silicon |
| Sinopec Shanghai Pet |
X FAB and Sinopec Shanghai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X FAB and Sinopec Shanghai
The main advantage of trading using opposite X FAB and Sinopec Shanghai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X FAB position performs unexpectedly, Sinopec Shanghai 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 Sinopec Shanghai will offset losses from the drop in Sinopec Shanghai'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 |
| Sinopec Shanghai vs. MCEWEN MINING INC | Sinopec Shanghai vs. De Grey Mining | Sinopec Shanghai vs. USWE SPORTS AB | Sinopec Shanghai vs. GALENA MINING LTD |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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