Correlation Between X FAB and Workiva
Can any of the company-specific risk be diversified away by investing in both X FAB and Workiva 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 Workiva 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 Workiva, you can compare the effects of market volatilities on X FAB and Workiva 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 Workiva. Check out your portfolio center. Please also check ongoing floating volatility patterns of X FAB and Workiva.
Diversification Opportunities for X FAB and Workiva
Very weak diversification
The 3 months correlation between XFB and Workiva is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and Workiva in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Workiva 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 Workiva. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Workiva has no effect on the direction of X FAB i.e., X FAB and Workiva go up and down completely randomly.
Pair Corralation between X FAB and Workiva
Assuming the 90 days trading horizon X FAB Silicon Foundries is expected to under-perform the Workiva. In addition to that, X FAB is 1.12 times more volatile than Workiva. It trades about -0.03 of its total potential returns per unit of risk. Workiva is currently generating about 0.02 per unit of volatility. If you would invest 8,500 in Workiva on October 29, 2024 and sell it today you would earn a total of 950.00 from holding Workiva or generate 11.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
X FAB Silicon Foundries vs. Workiva
Performance |
| Timeline |
| X FAB Silicon |
| Workiva |
X FAB and Workiva Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X FAB and Workiva
The main advantage of trading using opposite X FAB and Workiva positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X FAB position performs unexpectedly, Workiva 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 Workiva will offset losses from the drop in Workiva's long position.| X FAB vs. Reinsurance Group of | X FAB vs. GURU ORGANIC ENERGY | X FAB vs. PATTIES FOODS | X FAB vs. Cal Maine Foods |
| Workiva vs. SILICON LABORATOR | Workiva vs. GALENA MINING LTD | Workiva vs. Darden Restaurants | Workiva vs. Jacquet Metal Service |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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