Correlation Between X-FAB Silicon and BRAGG GAMING
Can any of the company-specific risk be diversified away by investing in both X-FAB Silicon and BRAGG GAMING 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 BRAGG GAMING 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 BRAGG GAMING GRP, you can compare the effects of market volatilities on X-FAB Silicon and BRAGG GAMING 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 BRAGG GAMING. Check out your portfolio center. Please also check ongoing floating volatility patterns of X-FAB Silicon and BRAGG GAMING.
Diversification Opportunities for X-FAB Silicon and BRAGG GAMING
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between X-FAB and BRAGG is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and BRAGG GAMING GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRAGG GAMING GRP 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 BRAGG GAMING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRAGG GAMING GRP has no effect on the direction of X-FAB Silicon i.e., X-FAB Silicon and BRAGG GAMING go up and down completely randomly.
Pair Corralation between X-FAB Silicon and BRAGG GAMING
Assuming the 90 days trading horizon X FAB Silicon Foundries is expected to under-perform the BRAGG GAMING. But the stock apears to be less risky and, when comparing its historical volatility, X FAB Silicon Foundries is 1.42 times less risky than BRAGG GAMING. The stock trades about -0.02 of its potential returns per unit of risk. The BRAGG GAMING GRP is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 388.00 in BRAGG GAMING GRP on October 11, 2024 and sell it today you would lose (28.00) from holding BRAGG GAMING GRP or give up 7.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
X FAB Silicon Foundries vs. BRAGG GAMING GRP
Performance |
| Timeline |
| X FAB Silicon |
| BRAGG GAMING GRP |
X-FAB Silicon and BRAGG GAMING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X-FAB Silicon and BRAGG GAMING
The main advantage of trading using opposite X-FAB Silicon and BRAGG GAMING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X-FAB Silicon position performs unexpectedly, BRAGG GAMING 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 BRAGG GAMING will offset losses from the drop in BRAGG GAMING's long position.| X-FAB Silicon vs. Apple Inc | X-FAB Silicon vs. Apple Inc | X-FAB Silicon vs. Apple Inc | X-FAB Silicon vs. Apple Inc |
| BRAGG GAMING vs. Carnegie Clean Energy | BRAGG GAMING vs. SMA Solar Technology | BRAGG GAMING vs. Vishay Intertechnology | BRAGG GAMING vs. X FAB Silicon Foundries |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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