Correlation Between X FAB and SENECA FOODS
Can any of the company-specific risk be diversified away by investing in both X FAB and SENECA 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 and SENECA 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 SENECA FOODS A, you can compare the effects of market volatilities on X FAB and SENECA 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 with a short position of SENECA FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of X FAB and SENECA FOODS.
Diversification Opportunities for X FAB and SENECA FOODS
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between XFB and SENECA is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and SENECA FOODS A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SENECA FOODS A 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 SENECA FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SENECA FOODS A has no effect on the direction of X FAB i.e., X FAB and SENECA FOODS go up and down completely randomly.
Pair Corralation between X FAB and SENECA FOODS
Assuming the 90 days trading horizon X FAB Silicon Foundries is expected to generate 1.12 times more return on investment than SENECA FOODS. However, X FAB is 1.12 times more volatile than SENECA FOODS A. It trades about 0.14 of its potential returns per unit of risk. SENECA FOODS A is currently generating about 0.08 per unit of risk. If you would invest 440.00 in X FAB Silicon Foundries on October 30, 2024 and sell it today you would earn a total of 56.00 from holding X FAB Silicon Foundries or generate 12.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.37% |
| Values | Daily Returns |
X FAB Silicon Foundries vs. SENECA FOODS A
Performance |
| Timeline |
| X FAB Silicon |
| SENECA FOODS A |
X FAB and SENECA FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X FAB and SENECA FOODS
The main advantage of trading using opposite X FAB and SENECA FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X FAB position performs unexpectedly, SENECA 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 SENECA FOODS will offset losses from the drop in SENECA FOODS's long position.| X FAB vs. Zijin Mining Group | X FAB vs. COLUMBIA SPORTSWEAR | X FAB vs. Gaztransport Technigaz SA | X FAB vs. De Grey Mining |
| SENECA FOODS vs. FRACTAL GAMING GROUP | SENECA FOODS vs. Media and Games | SENECA FOODS vs. QINGCI GAMES INC | SENECA FOODS vs. PLAYMATES TOYS |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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