Correlation Between X-FAB Silicon and PICKN PAY
Can any of the company-specific risk be diversified away by investing in both X-FAB Silicon and PICKN PAY 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 PICKN PAY 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 PICKN PAY STORES, you can compare the effects of market volatilities on X-FAB Silicon and PICKN PAY 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 PICKN PAY. Check out your portfolio center. Please also check ongoing floating volatility patterns of X-FAB Silicon and PICKN PAY.
Diversification Opportunities for X-FAB Silicon and PICKN PAY
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between X-FAB and PICKN is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and PICKN PAY STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PICKN PAY 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 PICKN PAY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PICKN PAY STORES has no effect on the direction of X-FAB Silicon i.e., X-FAB Silicon and PICKN PAY go up and down completely randomly.
Pair Corralation between X-FAB Silicon and PICKN PAY
Assuming the 90 days trading horizon X-FAB Silicon is expected to generate 3.24 times less return on investment than PICKN PAY. In addition to that, X-FAB Silicon is 1.06 times more volatile than PICKN PAY STORES. It trades about 0.09 of its total potential returns per unit of risk. PICKN PAY STORES is currently generating about 0.31 per unit of volatility. If you would invest 131.00 in PICKN PAY STORES on September 4, 2024 and sell it today you would earn a total of 23.00 from holding PICKN PAY STORES or generate 17.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
X FAB Silicon Foundries vs. PICKN PAY STORES
Performance |
| Timeline |
| X FAB Silicon |
| PICKN PAY STORES |
X-FAB Silicon and PICKN PAY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X-FAB Silicon and PICKN PAY
The main advantage of trading using opposite X-FAB Silicon and PICKN PAY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X-FAB Silicon position performs unexpectedly, PICKN PAY 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 PICKN PAY will offset losses from the drop in PICKN PAY's 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 |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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