Correlation Between X FAB and Thyssenkrupp
Can any of the company-specific risk be diversified away by investing in both X FAB and Thyssenkrupp 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 Thyssenkrupp 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 thyssenkrupp AG, you can compare the effects of market volatilities on X FAB and Thyssenkrupp 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 Thyssenkrupp. Check out your portfolio center. Please also check ongoing floating volatility patterns of X FAB and Thyssenkrupp.
Diversification Opportunities for X FAB and Thyssenkrupp
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between XFB and Thyssenkrupp is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and thyssenkrupp AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on thyssenkrupp AG 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 Thyssenkrupp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of thyssenkrupp AG has no effect on the direction of X FAB i.e., X FAB and Thyssenkrupp go up and down completely randomly.
Pair Corralation between X FAB and Thyssenkrupp
Assuming the 90 days trading horizon X FAB Silicon Foundries is expected to generate 1.03 times more return on investment than Thyssenkrupp. However, X FAB is 1.03 times more volatile than thyssenkrupp AG. It trades about -0.02 of its potential returns per unit of risk. thyssenkrupp AG is currently generating about -0.04 per unit of risk. If you would invest 754.00 in X FAB Silicon Foundries on October 13, 2024 and sell it today you would lose (244.00) from holding X FAB Silicon Foundries or give up 32.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
X FAB Silicon Foundries vs. thyssenkrupp AG
Performance |
| Timeline |
| X FAB Silicon |
| thyssenkrupp AG |
X FAB and Thyssenkrupp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X FAB and Thyssenkrupp
The main advantage of trading using opposite X FAB and Thyssenkrupp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X FAB position performs unexpectedly, Thyssenkrupp 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 Thyssenkrupp will offset losses from the drop in Thyssenkrupp'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 |
| Thyssenkrupp vs. COLUMBIA SPORTSWEAR | Thyssenkrupp vs. Sinopec Shanghai Petrochemical | Thyssenkrupp vs. PTT Global Chemical | Thyssenkrupp vs. X FAB Silicon Foundries |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |