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
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between XFB and Thyssenkrupp is 0.18. 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 under-perform the Thyssenkrupp. But the stock apears to be less risky and, when comparing its historical volatility, X FAB Silicon Foundries is 1.54 times less risky than Thyssenkrupp. The stock trades about -0.04 of its potential returns per unit of risk. The thyssenkrupp AG is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 380.00 in thyssenkrupp AG on November 6, 2024 and sell it today you would earn a total of 82.00 from holding thyssenkrupp AG or generate 21.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.91% |
| 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. MOLSON RS BEVERAGE | X FAB vs. CAL MAINE FOODS | X FAB vs. GBS Software AG | X FAB vs. Magic Software Enterprises |
| Thyssenkrupp vs. Discover Financial Services | Thyssenkrupp vs. PLANT VEDA FOODS | Thyssenkrupp vs. CN MODERN DAIRY | Thyssenkrupp vs. JSC Halyk bank |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Global Correlations Find global opportunities by holding instruments from different markets |