Correlation Between X FAB and SLR Investment
Can any of the company-specific risk be diversified away by investing in both X FAB and SLR Investment 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 SLR Investment 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 SLR Investment Corp, you can compare the effects of market volatilities on X FAB and SLR Investment 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 SLR Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of X FAB and SLR Investment.
Diversification Opportunities for X FAB and SLR Investment
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between XFB and SLR is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and SLR Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SLR Investment Corp 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 SLR Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SLR Investment Corp has no effect on the direction of X FAB i.e., X FAB and SLR Investment go up and down completely randomly.
Pair Corralation between X FAB and SLR Investment
Assuming the 90 days trading horizon X FAB Silicon Foundries is expected to under-perform the SLR Investment. In addition to that, X FAB is 2.05 times more volatile than SLR Investment Corp. It trades about -0.02 of its total potential returns per unit of risk. SLR Investment Corp is currently generating about 0.07 per unit of volatility. If you would invest 1,088 in SLR Investment Corp on October 12, 2024 and sell it today you would earn a total of 485.00 from holding SLR Investment Corp or generate 44.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
X FAB Silicon Foundries vs. SLR Investment Corp
Performance |
| Timeline |
| X FAB Silicon |
| SLR Investment Corp |
X FAB and SLR Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X FAB and SLR Investment
The main advantage of trading using opposite X FAB and SLR Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X FAB position performs unexpectedly, SLR Investment 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 SLR Investment will offset losses from the drop in SLR Investment's long position.| X FAB vs. Zijin Mining Group | X FAB vs. Forsys Metals Corp | X FAB vs. ScanSource | X FAB vs. Perseus Mining Limited |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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