Correlation Between X-FAB Silicon and Ecotel Communication
Can any of the company-specific risk be diversified away by investing in both X-FAB Silicon and Ecotel Communication 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 Ecotel Communication 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 ecotel communication ag, you can compare the effects of market volatilities on X-FAB Silicon and Ecotel Communication 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 Ecotel Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of X-FAB Silicon and Ecotel Communication.
Diversification Opportunities for X-FAB Silicon and Ecotel Communication
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between X-FAB and Ecotel is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and ecotel communication ag in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ecotel communication 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 Ecotel Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ecotel communication has no effect on the direction of X-FAB Silicon i.e., X-FAB Silicon and Ecotel Communication go up and down completely randomly.
Pair Corralation between X-FAB Silicon and Ecotel Communication
Assuming the 90 days trading horizon X FAB Silicon Foundries is expected to generate 1.9 times more return on investment than Ecotel Communication. However, X-FAB Silicon is 1.9 times more volatile than ecotel communication ag. It trades about -0.04 of its potential returns per unit of risk. ecotel communication ag is currently generating about -0.18 per unit of risk. If you would invest 498.00 in X FAB Silicon Foundries on October 11, 2024 and sell it today you would lose (10.00) from holding X FAB Silicon Foundries or give up 2.01% of portfolio value 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. ecotel communication ag
Performance |
| Timeline |
| X FAB Silicon |
| ecotel communication |
X-FAB Silicon and Ecotel Communication Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X-FAB Silicon and Ecotel Communication
The main advantage of trading using opposite X-FAB Silicon and Ecotel Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X-FAB Silicon position performs unexpectedly, Ecotel Communication 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 Ecotel Communication will offset losses from the drop in Ecotel Communication's long position.| X-FAB Silicon vs. THAI BEVERAGE | X-FAB Silicon vs. Thai Beverage Public | X-FAB Silicon vs. INDOFOOD AGRI RES | X-FAB Silicon vs. CN MODERN DAIRY |
| Ecotel Communication vs. CITY OFFICE REIT | Ecotel Communication vs. TEXAS ROADHOUSE | Ecotel Communication vs. OFFICE DEPOT | Ecotel Communication vs. COPLAND ROAD CAPITAL |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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