Correlation Between VARIOUS EATERIES and X FAB

Can any of the company-specific risk be diversified away by investing in both VARIOUS EATERIES and X FAB 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 VARIOUS EATERIES and X FAB into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between VARIOUS EATERIES LS and X FAB Silicon Foundries, you can compare the effects of market volatilities on VARIOUS EATERIES and X FAB 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 VARIOUS EATERIES with a short position of X FAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of VARIOUS EATERIES and X FAB.

Diversification Opportunities for VARIOUS EATERIES and X FAB

-0.55

Correlation Coefficient

VARIOUS EATERIES  X FAB

Excellent diversification

The 3 months correlation between VARIOUS and XFB is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding VARIOUS EATERIES LS and X FAB Silicon Foundries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X FAB Silicon and VARIOUS EATERIES 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 VARIOUS EATERIES LS are associated (or correlated) with X FAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X FAB Silicon has no effect on the direction of VARIOUS EATERIES i.e., VARIOUS EATERIES and X FAB go up and down completely randomly.

Pair Corralation between VARIOUS EATERIES and X FAB

Assuming the 90 days horizon VARIOUS EATERIES LS is expected to under-perform the X FAB. In addition to that, VARIOUS EATERIES is 1.48 times more volatile than X FAB Silicon Foundries. It trades about -0.14 of its total potential returns per unit of risk. X FAB Silicon Foundries is currently generating about 0.06 per unit of volatility. If you would invest  450.00  in X FAB Silicon Foundries on November 29, 2024 and sell it today you would earn a total of  38.00  from holding X FAB Silicon Foundries or generate 8.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

VARIOUS EATERIES LS  vs.  X FAB Silicon Foundries

VARIOUS EATERIES

Risk-Adjusted Performance

Very Weak

Over the last 90 days VARIOUS EATERIES LS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

X FAB Silicon

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in X FAB Silicon Foundries are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile fundamental drivers, X FAB may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with VARIOUS EATERIES and X FAB

The main advantage of trading using opposite VARIOUS EATERIES and X FAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VARIOUS EATERIES position performs unexpectedly, X FAB 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 X FAB will offset losses from the drop in X FAB's long position.

The idea behind VARIOUS EATERIES LS and X FAB Silicon Foundries pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.