Correlation Between X FAB and NorAm Drilling
Can any of the company-specific risk be diversified away by investing in both X FAB and NorAm Drilling 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 and NorAm Drilling 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 NorAm Drilling AS, you can compare the effects of market volatilities on X FAB and NorAm Drilling 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 with a short position of NorAm Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of X FAB and NorAm Drilling.
Diversification Opportunities for X FAB and NorAm Drilling
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between XFB and NorAm is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and NorAm Drilling AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NorAm Drilling AS and X FAB 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 NorAm Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NorAm Drilling AS has no effect on the direction of X FAB i.e., X FAB and NorAm Drilling go up and down completely randomly.
Pair Corralation between X FAB and NorAm Drilling
Assuming the 90 days trading horizon X FAB Silicon Foundries is expected to under-perform the NorAm Drilling. But the stock apears to be less risky and, when comparing its historical volatility, X FAB Silicon Foundries is 1.75 times less risky than NorAm Drilling. The stock trades about -0.03 of its potential returns per unit of risk. The NorAm Drilling AS is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 16.00 in NorAm Drilling AS on October 31, 2024 and sell it today you would earn a total of 285.00 from holding NorAm Drilling AS or generate 1781.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.6% |
| Values | Daily Returns |
X FAB Silicon Foundries vs. NorAm Drilling AS
Performance |
| Timeline |
| X FAB Silicon |
| NorAm Drilling AS |
X FAB and NorAm Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X FAB and NorAm Drilling
The main advantage of trading using opposite X FAB and NorAm Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X FAB position performs unexpectedly, NorAm Drilling 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 NorAm Drilling will offset losses from the drop in NorAm Drilling's long position.| X FAB vs. Tianjin Capital Environmental | X FAB vs. GEELY AUTOMOBILE | X FAB vs. CALTAGIRONE EDITORE | X FAB vs. MOUNT GIBSON IRON |
| NorAm Drilling vs. DeVry Education Group | NorAm Drilling vs. Perdoceo Education | NorAm Drilling vs. IDP EDUCATION LTD | NorAm Drilling vs. G III Apparel Group |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |