Correlation Between X-FAB Silicon and Thai Beverage
Can any of the company-specific risk be diversified away by investing in both X-FAB Silicon and Thai Beverage 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 Thai Beverage 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 Thai Beverage Public, you can compare the effects of market volatilities on X-FAB Silicon and Thai Beverage 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 Thai Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of X-FAB Silicon and Thai Beverage.
Diversification Opportunities for X-FAB Silicon and Thai Beverage
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between X-FAB and Thai is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and Thai Beverage Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Beverage Public 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 Thai Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Beverage Public has no effect on the direction of X-FAB Silicon i.e., X-FAB Silicon and Thai Beverage go up and down completely randomly.
Pair Corralation between X-FAB Silicon and Thai Beverage
Assuming the 90 days trading horizon X FAB Silicon Foundries is expected to under-perform the Thai Beverage. In addition to that, X-FAB Silicon is 1.02 times more volatile than Thai Beverage Public. It trades about -0.08 of its total potential returns per unit of risk. Thai Beverage Public is currently generating about 0.06 per unit of volatility. If you would invest 35.00 in Thai Beverage Public on August 28, 2024 and sell it today you would earn a total of 1.00 from holding Thai Beverage Public or generate 2.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
X FAB Silicon Foundries vs. Thai Beverage Public
Performance |
| Timeline |
| X FAB Silicon |
| Thai Beverage Public |
X-FAB Silicon and Thai Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X-FAB Silicon and Thai Beverage
The main advantage of trading using opposite X-FAB Silicon and Thai Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X-FAB Silicon position performs unexpectedly, Thai Beverage 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 Thai Beverage will offset losses from the drop in Thai Beverage'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 |
| Thai Beverage vs. LGI Homes | Thai Beverage vs. Hisense Home Appliances | Thai Beverage vs. MeVis Medical Solutions | Thai Beverage vs. Neinor Homes SA |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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