Correlation Between X FAB and X Fab
Can any of the company-specific risk be diversified away by investing in both X FAB and X Fab 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 X Fab 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 X Fab Silicon, you can compare the effects of market volatilities on X FAB and X Fab 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 X Fab. Check out your portfolio center. Please also check ongoing floating volatility patterns of X FAB and X Fab.
Diversification Opportunities for X FAB and X Fab
Almost no diversification
The 3 months correlation between XFB and XFB is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and X Fab Silicon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X Fab Silicon 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 X Fab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X Fab Silicon has no effect on the direction of X FAB i.e., X FAB and X Fab go up and down completely randomly.
Pair Corralation between X FAB and X Fab
Assuming the 90 days trading horizon X FAB Silicon Foundries is expected to generate 1.14 times more return on investment than X Fab. However, X FAB is 1.14 times more volatile than X Fab Silicon. It trades about -0.08 of its potential returns per unit of risk. X Fab Silicon is currently generating about -0.1 per unit of risk. If you would invest 655.00 in X FAB Silicon Foundries on September 3, 2024 and sell it today you would lose (205.00) from holding X FAB Silicon Foundries or give up 31.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
X FAB Silicon Foundries vs. X Fab Silicon
Performance |
| Timeline |
| X FAB Silicon |
| X Fab Silicon |
X FAB and X Fab Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X FAB and X Fab
The main advantage of trading using opposite X FAB and X Fab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X FAB position performs unexpectedly, X Fab 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 X Fab will offset losses from the drop in X Fab's long position.The idea behind X FAB Silicon Foundries and X Fab Silicon pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| X Fab vs. Singapore Airlines Limited | X Fab vs. FANDIFI TECHNOLOGY P | X Fab vs. Microchip Technology Incorporated | X Fab vs. AECOM TECHNOLOGY |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |