Correlation Between X FAB and THRACE PLASTICS
Can any of the company-specific risk be diversified away by investing in both X FAB and THRACE PLASTICS 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 THRACE PLASTICS 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 THRACE PLASTICS, you can compare the effects of market volatilities on X FAB and THRACE PLASTICS 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 THRACE PLASTICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of X FAB and THRACE PLASTICS.
Diversification Opportunities for X FAB and THRACE PLASTICS
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between XFB and THRACE is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and THRACE PLASTICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THRACE PLASTICS 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 THRACE PLASTICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THRACE PLASTICS has no effect on the direction of X FAB i.e., X FAB and THRACE PLASTICS go up and down completely randomly.
Pair Corralation between X FAB and THRACE PLASTICS
Assuming the 90 days trading horizon X FAB is expected to generate 4.95 times less return on investment than THRACE PLASTICS. In addition to that, X FAB is 1.89 times more volatile than THRACE PLASTICS. It trades about 0.02 of its total potential returns per unit of risk. THRACE PLASTICS is currently generating about 0.17 per unit of volatility. If you would invest 395.00 in THRACE PLASTICS on October 16, 2024 and sell it today you would earn a total of 17.00 from holding THRACE PLASTICS or generate 4.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
X FAB Silicon Foundries vs. THRACE PLASTICS
Performance |
| Timeline |
| X FAB Silicon |
| THRACE PLASTICS |
X FAB and THRACE PLASTICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X FAB and THRACE PLASTICS
The main advantage of trading using opposite X FAB and THRACE PLASTICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X FAB position performs unexpectedly, THRACE PLASTICS 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 THRACE PLASTICS will offset losses from the drop in THRACE PLASTICS's long position.| X FAB vs. CHRYSALIS INVESTMENTS LTD | X FAB vs. JLF INVESTMENT | X FAB vs. Playa Hotels Resorts | X FAB vs. Hyatt Hotels |
| THRACE PLASTICS vs. Coor Service Management | THRACE PLASTICS vs. AECOM TECHNOLOGY | THRACE PLASTICS vs. Motorcar Parts of | THRACE PLASTICS vs. Take Two Interactive Software |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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