Correlation Between X FAB and AEON STORES
Can any of the company-specific risk be diversified away by investing in both X FAB and AEON STORES 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 AEON STORES 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 AEON STORES, you can compare the effects of market volatilities on X FAB and AEON STORES 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 AEON STORES. Check out your portfolio center. Please also check ongoing floating volatility patterns of X FAB and AEON STORES.
Diversification Opportunities for X FAB and AEON STORES
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between XFB and AEON is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and AEON STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEON STORES 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 AEON STORES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AEON STORES has no effect on the direction of X FAB i.e., X FAB and AEON STORES go up and down completely randomly.
Pair Corralation between X FAB and AEON STORES
Assuming the 90 days trading horizon X FAB Silicon Foundries is expected to generate 24.16 times more return on investment than AEON STORES. However, X FAB is 24.16 times more volatile than AEON STORES. It trades about 0.02 of its potential returns per unit of risk. AEON STORES is currently generating about -0.18 per unit of risk. If you would invest 496.00 in X FAB Silicon Foundries on September 12, 2024 and sell it today you would earn a total of 2.00 from holding X FAB Silicon Foundries or generate 0.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
X FAB Silicon Foundries vs. AEON STORES
Performance |
| Timeline |
| X FAB Silicon |
| AEON STORES |
X FAB and AEON STORES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X FAB and AEON STORES
The main advantage of trading using opposite X FAB and AEON STORES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X FAB position performs unexpectedly, AEON STORES 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 AEON STORES will offset losses from the drop in AEON STORES's long position.| X FAB vs. PLAYTIKA HOLDING DL 01 | X FAB vs. Jacquet Metal Service | X FAB vs. PARKEN Sport Entertainment | X FAB vs. TOWNSQUARE MEDIA INC |
| AEON STORES vs. Apple Inc | AEON STORES vs. Apple Inc | AEON STORES vs. Apple Inc | AEON STORES vs. Apple Inc |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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