Correlation Between X-FAB Silicon and Haier Smart
Can any of the company-specific risk be diversified away by investing in both X-FAB Silicon and Haier Smart 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 Haier Smart 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 Haier Smart Home, you can compare the effects of market volatilities on X-FAB Silicon and Haier Smart 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 Haier Smart. Check out your portfolio center. Please also check ongoing floating volatility patterns of X-FAB Silicon and Haier Smart.
Diversification Opportunities for X-FAB Silicon and Haier Smart
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between X-FAB and Haier is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and Haier Smart Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haier Smart Home 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 Haier Smart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haier Smart Home has no effect on the direction of X-FAB Silicon i.e., X-FAB Silicon and Haier Smart go up and down completely randomly.
Pair Corralation between X-FAB Silicon and Haier Smart
Assuming the 90 days trading horizon X FAB Silicon Foundries is expected to generate 1.79 times more return on investment than Haier Smart. However, X-FAB Silicon is 1.79 times more volatile than Haier Smart Home. It trades about 0.06 of its potential returns per unit of risk. Haier Smart Home is currently generating about 0.04 per unit of risk. If you would invest 417.00 in X FAB Silicon Foundries on September 5, 2024 and sell it today you would earn a total of 13.00 from holding X FAB Silicon Foundries or generate 3.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
X FAB Silicon Foundries vs. Haier Smart Home
Performance |
| Timeline |
| X FAB Silicon |
| Haier Smart Home |
X-FAB Silicon and Haier Smart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X-FAB Silicon and Haier Smart
The main advantage of trading using opposite X-FAB Silicon and Haier Smart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X-FAB Silicon position performs unexpectedly, Haier Smart 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 Haier Smart will offset losses from the drop in Haier Smart'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 |
| Haier Smart vs. Vishay Intertechnology | Haier Smart vs. UNIVERSAL MUSIC GROUP | Haier Smart vs. X FAB Silicon Foundries | Haier Smart vs. Tencent Music Entertainment |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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