Correlation Between X Fab and Intel
Can any of the company-specific risk be diversified away by investing in both X Fab and Intel 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 Intel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between X Fab Silicon and Intel, you can compare the effects of market volatilities on X Fab and Intel 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 Intel. Check out your portfolio center. Please also check ongoing floating volatility patterns of X Fab and Intel.
Diversification Opportunities for X Fab and Intel
Excellent diversification
The 3 months correlation between XFB and Intel is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding X Fab Silicon and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel 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 are associated (or correlated) with Intel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intel has no effect on the direction of X Fab i.e., X Fab and Intel go up and down completely randomly.
Pair Corralation between X Fab and Intel
Assuming the 90 days horizon X Fab Silicon is expected to under-perform the Intel. But the stock apears to be less risky and, when comparing its historical volatility, X Fab Silicon is 1.18 times less risky than Intel. The stock trades about -0.05 of its potential returns per unit of risk. The Intel is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 2,691 in Intel on August 31, 2024 and sell it today you would lose (458.00) from holding Intel or give up 17.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
X Fab Silicon vs. Intel
Performance |
| Timeline |
| X Fab Silicon |
| Intel |
X Fab and Intel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X Fab and Intel
The main advantage of trading using opposite X Fab and Intel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X Fab position performs unexpectedly, Intel 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 Intel will offset losses from the drop in Intel's long position.| X Fab vs. NVIDIA | X Fab vs. Taiwan Semiconductor Manufacturing | X Fab vs. Advanced Micro Devices | X Fab vs. Intel |
| Intel vs. BE Semiconductor Industries | Intel vs. PKSHA TECHNOLOGY INC | Intel vs. Check Point Software | Intel vs. X Fab Silicon |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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