Correlation Between X-FAB Silicon and National Storage
Can any of the company-specific risk be diversified away by investing in both X-FAB Silicon and National Storage 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 National Storage 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 National Storage Affiliates, you can compare the effects of market volatilities on X-FAB Silicon and National Storage 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 National Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of X-FAB Silicon and National Storage.
Diversification Opportunities for X-FAB Silicon and National Storage
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between X-FAB and National is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and National Storage Affiliates in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Storage Aff 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 National Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Storage Aff has no effect on the direction of X-FAB Silicon i.e., X-FAB Silicon and National Storage go up and down completely randomly.
Pair Corralation between X-FAB Silicon and National Storage
Assuming the 90 days trading horizon X FAB Silicon Foundries is expected to generate 1.39 times more return on investment than National Storage. However, X-FAB Silicon is 1.39 times more volatile than National Storage Affiliates. It trades about 0.03 of its potential returns per unit of risk. National Storage Affiliates is currently generating about 0.01 per unit of risk. If you would invest 491.00 in X FAB Silicon Foundries on November 3, 2024 and sell it today you would earn a total of 5.00 from holding X FAB Silicon Foundries or generate 1.02% 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. National Storage Affiliates
Performance |
| Timeline |
| X FAB Silicon |
| National Storage Aff |
X-FAB Silicon and National Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X-FAB Silicon and National Storage
The main advantage of trading using opposite X-FAB Silicon and National Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X-FAB Silicon position performs unexpectedly, National Storage 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 National Storage will offset losses from the drop in National Storage's long position.| X-FAB Silicon vs. SIVERS SEMICONDUCTORS AB | X-FAB Silicon vs. NorAm Drilling AS | X-FAB Silicon vs. Volkswagen AG | X-FAB Silicon vs. Darden Restaurants |
| National Storage vs. ARDAGH METAL PACDL 0001 | National Storage vs. Singapore Airlines Limited | National Storage vs. SIERRA METALS | National Storage vs. FIRST SHIP LEASE |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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