Correlation Between X-FAB Silicon and MKS Instruments
Can any of the company-specific risk be diversified away by investing in both X-FAB Silicon and MKS Instruments 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 MKS Instruments 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 MKS Instruments, you can compare the effects of market volatilities on X-FAB Silicon and MKS Instruments 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 MKS Instruments. Check out your portfolio center. Please also check ongoing floating volatility patterns of X-FAB Silicon and MKS Instruments.
Diversification Opportunities for X-FAB Silicon and MKS Instruments
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between X-FAB and MKS is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and MKS Instruments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MKS Instruments 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 MKS Instruments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MKS Instruments has no effect on the direction of X-FAB Silicon i.e., X-FAB Silicon and MKS Instruments go up and down completely randomly.
Pair Corralation between X-FAB Silicon and MKS Instruments
Assuming the 90 days trading horizon X-FAB Silicon is expected to generate 4.86 times less return on investment than MKS Instruments. In addition to that, X-FAB Silicon is 1.03 times more volatile than MKS Instruments. It trades about 0.03 of its total potential returns per unit of risk. MKS Instruments is currently generating about 0.15 per unit of volatility. If you would invest 10,100 in MKS Instruments on November 3, 2024 and sell it today you would earn a total of 775.00 from holding MKS Instruments or generate 7.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
X FAB Silicon Foundries vs. MKS Instruments
Performance |
| Timeline |
| X FAB Silicon |
| MKS Instruments |
X-FAB Silicon and MKS Instruments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X-FAB Silicon and MKS Instruments
The main advantage of trading using opposite X-FAB Silicon and MKS Instruments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X-FAB Silicon position performs unexpectedly, MKS Instruments 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 MKS Instruments will offset losses from the drop in MKS Instruments' long position.| X-FAB Silicon vs. KOBE STEEL LTD | X-FAB Silicon vs. Diamyd Medical AB | X-FAB Silicon vs. MOUNT GIBSON IRON | X-FAB Silicon vs. ONWARD MEDICAL BV |
| MKS Instruments vs. Flutter Entertainment PLC | MKS Instruments vs. ecotel communication ag | MKS Instruments vs. Verizon Communications | MKS Instruments vs. Cairo Communication SpA |
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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