Correlation Between X-FAB Silicon and US FOODS
Can any of the company-specific risk be diversified away by investing in both X-FAB Silicon and US FOODS 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 US FOODS 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 US FOODS HOLDING, you can compare the effects of market volatilities on X-FAB Silicon and US FOODS 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 US FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of X-FAB Silicon and US FOODS.
Diversification Opportunities for X-FAB Silicon and US FOODS
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between X-FAB and UFH is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and US FOODS HOLDING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US FOODS HOLDING 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 US FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US FOODS HOLDING has no effect on the direction of X-FAB Silicon i.e., X-FAB Silicon and US FOODS go up and down completely randomly.
Pair Corralation between X-FAB Silicon and US FOODS
Assuming the 90 days trading horizon X-FAB Silicon is expected to generate 10.65 times less return on investment than US FOODS. In addition to that, X-FAB Silicon is 1.98 times more volatile than US FOODS HOLDING. It trades about 0.01 of its total potential returns per unit of risk. US FOODS HOLDING is currently generating about 0.19 per unit of volatility. If you would invest 5,600 in US FOODS HOLDING on October 24, 2024 and sell it today you would earn a total of 1,000.00 from holding US FOODS HOLDING or generate 17.86% 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. US FOODS HOLDING
Performance |
| Timeline |
| X FAB Silicon |
| US FOODS HOLDING |
X-FAB Silicon and US FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X-FAB Silicon and US FOODS
The main advantage of trading using opposite X-FAB Silicon and US FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X-FAB Silicon position performs unexpectedly, US FOODS 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 US FOODS will offset losses from the drop in US FOODS's long position.| X-FAB Silicon vs. PLANT VEDA FOODS | X-FAB Silicon vs. COPLAND ROAD CAPITAL | X-FAB Silicon vs. PATTIES FOODS | X-FAB Silicon vs. NAGOYA RAILROAD |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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