Correlation Between X FAB and WOLTERS KLUWER
Can any of the company-specific risk be diversified away by investing in both X FAB and WOLTERS KLUWER 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 WOLTERS KLUWER 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 WOLTERS KLUWER ADR, you can compare the effects of market volatilities on X FAB and WOLTERS KLUWER 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 WOLTERS KLUWER. Check out your portfolio center. Please also check ongoing floating volatility patterns of X FAB and WOLTERS KLUWER.
Diversification Opportunities for X FAB and WOLTERS KLUWER
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between XFB and WOLTERS is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and WOLTERS KLUWER ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WOLTERS KLUWER ADR 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 WOLTERS KLUWER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WOLTERS KLUWER ADR has no effect on the direction of X FAB i.e., X FAB and WOLTERS KLUWER go up and down completely randomly.
Pair Corralation between X FAB and WOLTERS KLUWER
Assuming the 90 days trading horizon X FAB is expected to generate 11.71 times less return on investment than WOLTERS KLUWER. In addition to that, X FAB is 1.92 times more volatile than WOLTERS KLUWER ADR. It trades about 0.01 of its total potential returns per unit of risk. WOLTERS KLUWER ADR is currently generating about 0.23 per unit of volatility. If you would invest 16,100 in WOLTERS KLUWER ADR on October 30, 2024 and sell it today you would earn a total of 1,100 from holding WOLTERS KLUWER ADR or generate 6.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
X FAB Silicon Foundries vs. WOLTERS KLUWER ADR
Performance |
| Timeline |
| X FAB Silicon |
| WOLTERS KLUWER ADR |
X FAB and WOLTERS KLUWER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X FAB and WOLTERS KLUWER
The main advantage of trading using opposite X FAB and WOLTERS KLUWER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X FAB position performs unexpectedly, WOLTERS KLUWER 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 WOLTERS KLUWER will offset losses from the drop in WOLTERS KLUWER's long position.| X FAB vs. betterU Education Corp | X FAB vs. DeVry Education Group | X FAB vs. EMBARK EDUCATION LTD | X FAB vs. Endeavour Mining PLC |
| WOLTERS KLUWER vs. Delta Electronics Public | WOLTERS KLUWER vs. TITAN MACHINERY | WOLTERS KLUWER vs. WIMFARM SA EO | WOLTERS KLUWER vs. Sumitomo Mitsui Construction |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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