Correlation Between X FAB and MINCO SILVER
Can any of the company-specific risk be diversified away by investing in both X FAB and MINCO SILVER 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 MINCO SILVER 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 MINCO SILVER, you can compare the effects of market volatilities on X FAB and MINCO SILVER 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 MINCO SILVER. Check out your portfolio center. Please also check ongoing floating volatility patterns of X FAB and MINCO SILVER.
Diversification Opportunities for X FAB and MINCO SILVER
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between XFB and MINCO is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and MINCO SILVER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MINCO SILVER 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 MINCO SILVER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MINCO SILVER has no effect on the direction of X FAB i.e., X FAB and MINCO SILVER go up and down completely randomly.
Pair Corralation between X FAB and MINCO SILVER
Assuming the 90 days trading horizon X FAB is expected to generate 1.36 times less return on investment than MINCO SILVER. But when comparing it to its historical volatility, X FAB Silicon Foundries is 1.6 times less risky than MINCO SILVER. It trades about 0.07 of its potential returns per unit of risk. MINCO SILVER is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 13.00 in MINCO SILVER on October 11, 2024 and sell it today you would earn a total of 1.00 from holding MINCO SILVER or generate 7.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
X FAB Silicon Foundries vs. MINCO SILVER
Performance |
| Timeline |
| X FAB Silicon |
| MINCO SILVER |
X FAB and MINCO SILVER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X FAB and MINCO SILVER
The main advantage of trading using opposite X FAB and MINCO SILVER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X FAB position performs unexpectedly, MINCO SILVER 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 MINCO SILVER will offset losses from the drop in MINCO SILVER's long position.| X FAB vs. Comba Telecom Systems | X FAB vs. PARKEN Sport Entertainment | X FAB vs. Tencent Music Entertainment | X FAB vs. Seven West Media |
| MINCO SILVER vs. United Natural Foods | MINCO SILVER vs. TYSON FOODS A | MINCO SILVER vs. Harmony Gold Mining | MINCO SILVER vs. PREMIER FOODS |
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 Positions Ratings module to 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.
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