Correlation Between X FAB and SEI INVESTMENTS
Can any of the company-specific risk be diversified away by investing in both X FAB and SEI INVESTMENTS 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 SEI INVESTMENTS 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 SEI INVESTMENTS, you can compare the effects of market volatilities on X FAB and SEI INVESTMENTS 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 SEI INVESTMENTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of X FAB and SEI INVESTMENTS.
Diversification Opportunities for X FAB and SEI INVESTMENTS
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between XFB and SEI is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and SEI INVESTMENTS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEI INVESTMENTS 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 SEI INVESTMENTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEI INVESTMENTS has no effect on the direction of X FAB i.e., X FAB and SEI INVESTMENTS go up and down completely randomly.
Pair Corralation between X FAB and SEI INVESTMENTS
Assuming the 90 days trading horizon X FAB Silicon Foundries is expected to under-perform the SEI INVESTMENTS. In addition to that, X FAB is 2.7 times more volatile than SEI INVESTMENTS. It trades about -0.02 of its total potential returns per unit of risk. SEI INVESTMENTS is currently generating about 0.09 per unit of volatility. If you would invest 5,486 in SEI INVESTMENTS on October 12, 2024 and sell it today you would earn a total of 2,464 from holding SEI INVESTMENTS or generate 44.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
X FAB Silicon Foundries vs. SEI INVESTMENTS
Performance |
| Timeline |
| X FAB Silicon |
| SEI INVESTMENTS |
X FAB and SEI INVESTMENTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X FAB and SEI INVESTMENTS
The main advantage of trading using opposite X FAB and SEI INVESTMENTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X FAB position performs unexpectedly, SEI INVESTMENTS 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 SEI INVESTMENTS will offset losses from the drop in SEI INVESTMENTS's long position.| X FAB vs. Zijin Mining Group | X FAB vs. Forsys Metals Corp | X FAB vs. ScanSource | X FAB vs. Perseus Mining Limited |
| SEI INVESTMENTS vs. TITAN MACHINERY | SEI INVESTMENTS vs. Nufarm Limited | SEI INVESTMENTS vs. Tokyu Construction Co | SEI INVESTMENTS vs. China BlueChemical |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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