Correlation Between X-FAB Silicon and Burlington Stores
Can any of the company-specific risk be diversified away by investing in both X-FAB Silicon and Burlington 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 Silicon and Burlington 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 Burlington Stores, you can compare the effects of market volatilities on X-FAB Silicon and Burlington 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 Silicon with a short position of Burlington Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of X-FAB Silicon and Burlington Stores.
Diversification Opportunities for X-FAB Silicon and Burlington Stores
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between X-FAB and Burlington is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and Burlington Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burlington Stores 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 Burlington Stores. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burlington Stores has no effect on the direction of X-FAB Silicon i.e., X-FAB Silicon and Burlington Stores go up and down completely randomly.
Pair Corralation between X-FAB Silicon and Burlington Stores
Assuming the 90 days trading horizon X-FAB Silicon is expected to generate 3.38 times less return on investment than Burlington Stores. In addition to that, X-FAB Silicon is 1.26 times more volatile than Burlington Stores. It trades about 0.09 of its total potential returns per unit of risk. Burlington Stores is currently generating about 0.38 per unit of volatility. If you would invest 22,600 in Burlington Stores on September 4, 2024 and sell it today you would earn a total of 4,200 from holding Burlington Stores or generate 18.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
X FAB Silicon Foundries vs. Burlington Stores
Performance |
| Timeline |
| X FAB Silicon |
| Burlington Stores |
X-FAB Silicon and Burlington Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X-FAB Silicon and Burlington Stores
The main advantage of trading using opposite X-FAB Silicon and Burlington Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X-FAB Silicon position performs unexpectedly, Burlington 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 Burlington Stores will offset losses from the drop in Burlington Stores' long position.| X-FAB Silicon vs. Suntory Beverage Food | X-FAB Silicon vs. SMA Solar Technology | X-FAB Silicon vs. Microchip Technology Incorporated | X-FAB Silicon vs. Micron Technology |
| Burlington Stores vs. Apple Inc | Burlington Stores vs. Apple Inc | Burlington Stores vs. Apple Inc | Burlington 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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