Correlation Between X-FAB Silicon and JD SPORTS
Can any of the company-specific risk be diversified away by investing in both X-FAB Silicon and JD SPORTS 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 JD SPORTS 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 JD SPORTS FASH, you can compare the effects of market volatilities on X-FAB Silicon and JD SPORTS 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 JD SPORTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of X-FAB Silicon and JD SPORTS.
Diversification Opportunities for X-FAB Silicon and JD SPORTS
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between X-FAB and 9JD is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and JD SPORTS FASH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JD SPORTS FASH 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 JD SPORTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JD SPORTS FASH has no effect on the direction of X-FAB Silicon i.e., X-FAB Silicon and JD SPORTS go up and down completely randomly.
Pair Corralation between X-FAB Silicon and JD SPORTS
Assuming the 90 days trading horizon X FAB Silicon Foundries is expected to generate 1.06 times more return on investment than JD SPORTS. However, X-FAB Silicon is 1.06 times more volatile than JD SPORTS FASH. It trades about -0.04 of its potential returns per unit of risk. JD SPORTS FASH is currently generating about -0.39 per unit of risk. If you would invest 501.00 in X FAB Silicon Foundries on October 9, 2024 and sell it today you would lose (6.00) from holding X FAB Silicon Foundries or give up 1.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
X FAB Silicon Foundries vs. JD SPORTS FASH
Performance |
| Timeline |
| X FAB Silicon |
| JD SPORTS FASH |
X-FAB Silicon and JD SPORTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X-FAB Silicon and JD SPORTS
The main advantage of trading using opposite X-FAB Silicon and JD SPORTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X-FAB Silicon position performs unexpectedly, JD SPORTS 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 JD SPORTS will offset losses from the drop in JD SPORTS's long position.| X-FAB Silicon vs. HANOVER INSURANCE | X-FAB Silicon vs. Reinsurance Group of | X-FAB Silicon vs. Plastic Omnium | X-FAB Silicon vs. SBI Insurance Group |
| JD SPORTS vs. Superior Plus Corp | JD SPORTS vs. NMI Holdings | JD SPORTS vs. SIVERS SEMICONDUCTORS AB | JD SPORTS vs. Talanx AG |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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