Correlation Between X-FAB Silicon and PANDORA
Can any of the company-specific risk be diversified away by investing in both X-FAB Silicon and PANDORA 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 Silicon and PANDORA 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 PANDORA, you can compare the effects of market volatilities on X-FAB Silicon and PANDORA 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 Silicon with a short position of PANDORA. Check out your portfolio center. Please also check ongoing floating volatility patterns of X-FAB Silicon and PANDORA.
Diversification Opportunities for X-FAB Silicon and PANDORA
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between X-FAB and PANDORA is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and PANDORA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PANDORA and X-FAB Silicon 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 PANDORA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PANDORA has no effect on the direction of X-FAB Silicon i.e., X-FAB Silicon and PANDORA go up and down completely randomly.
Pair Corralation between X-FAB Silicon and PANDORA
Assuming the 90 days trading horizon X FAB Silicon Foundries is expected to under-perform the PANDORA. In addition to that, X-FAB Silicon is 1.26 times more volatile than PANDORA. It trades about -0.02 of its total potential returns per unit of risk. PANDORA is currently generating about 0.13 per unit of volatility. If you would invest 5,042 in PANDORA on September 5, 2024 and sell it today you would earn a total of 10,618 from holding PANDORA or generate 210.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
X FAB Silicon Foundries vs. PANDORA
Performance |
| Timeline |
| X FAB Silicon |
| PANDORA |
X-FAB Silicon and PANDORA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X-FAB Silicon and PANDORA
The main advantage of trading using opposite X-FAB Silicon and PANDORA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X-FAB Silicon position performs unexpectedly, PANDORA 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 PANDORA will offset losses from the drop in PANDORA's long position.| X-FAB Silicon vs. Apple Inc | X-FAB Silicon vs. Apple Inc | X-FAB Silicon vs. Apple Inc | X-FAB Silicon vs. Apple Inc |
| PANDORA vs. EPSILON HEALTHCARE LTD | PANDORA vs. CeoTronics AG | PANDORA vs. X FAB Silicon Foundries | PANDORA vs. Wayside Technology Group |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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