Correlation Between X-FAB Silicon and Commercial Vehicle
Can any of the company-specific risk be diversified away by investing in both X-FAB Silicon and Commercial Vehicle 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 Commercial Vehicle 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 Commercial Vehicle Group, you can compare the effects of market volatilities on X-FAB Silicon and Commercial Vehicle 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 Commercial Vehicle. Check out your portfolio center. Please also check ongoing floating volatility patterns of X-FAB Silicon and Commercial Vehicle.
Diversification Opportunities for X-FAB Silicon and Commercial Vehicle
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between X-FAB and Commercial is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and Commercial Vehicle Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commercial Vehicle 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 Commercial Vehicle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commercial Vehicle has no effect on the direction of X-FAB Silicon i.e., X-FAB Silicon and Commercial Vehicle go up and down completely randomly.
Pair Corralation between X-FAB Silicon and Commercial Vehicle
Assuming the 90 days trading horizon X FAB Silicon Foundries is expected to generate 0.92 times more return on investment than Commercial Vehicle. However, X FAB Silicon Foundries is 1.09 times less risky than Commercial Vehicle. It trades about -0.06 of its potential returns per unit of risk. Commercial Vehicle Group is currently generating about -0.17 per unit of risk. If you would invest 495.00 in X FAB Silicon Foundries on November 5, 2024 and sell it today you would lose (21.00) from holding X FAB Silicon Foundries or give up 4.24% 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. Commercial Vehicle Group
Performance |
| Timeline |
| X FAB Silicon |
| Commercial Vehicle |
X-FAB Silicon and Commercial Vehicle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X-FAB Silicon and Commercial Vehicle
The main advantage of trading using opposite X-FAB Silicon and Commercial Vehicle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X-FAB Silicon position performs unexpectedly, Commercial Vehicle 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 Commercial Vehicle will offset losses from the drop in Commercial Vehicle's long position.| X-FAB Silicon vs. Citic Telecom International | X-FAB Silicon vs. TELECOM ITALIA | X-FAB Silicon vs. MAG SILVER | X-FAB Silicon vs. Chunghwa Telecom Co |
| Commercial Vehicle vs. SIVERS SEMICONDUCTORS AB | Commercial Vehicle vs. NorAm Drilling AS | Commercial Vehicle vs. Volkswagen AG | Commercial Vehicle vs. Darden Restaurants |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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