Correlation Between CMG Cleantech and X Fab
Can any of the company-specific risk be diversified away by investing in both CMG Cleantech 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 CMG Cleantech and X Fab into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CMG Cleantech SA and X Fab Silicon, you can compare the effects of market volatilities on CMG Cleantech 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 CMG Cleantech with a short position of X Fab. Check out your portfolio center. Please also check ongoing floating volatility patterns of CMG Cleantech and X Fab.
Diversification Opportunities for CMG Cleantech and X Fab
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CMG and XFAB is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding CMG Cleantech SA and X Fab Silicon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X Fab Silicon and CMG Cleantech 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 CMG Cleantech SA 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 CMG Cleantech i.e., CMG Cleantech and X Fab go up and down completely randomly.
Pair Corralation between CMG Cleantech and X Fab
Assuming the 90 days trading horizon CMG Cleantech SA is expected to generate 1.44 times more return on investment than X Fab. However, CMG Cleantech is 1.44 times more volatile than X Fab Silicon. It trades about 0.23 of its potential returns per unit of risk. X Fab Silicon is currently generating about -0.07 per unit of risk. If you would invest 68.00 in CMG Cleantech SA on September 4, 2024 and sell it today you would earn a total of 55.00 from holding CMG Cleantech SA or generate 80.88% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.46% |
Values | Daily Returns |
CMG Cleantech SA vs. X Fab Silicon
Performance |
Timeline |
CMG Cleantech SA |
X Fab Silicon |
CMG Cleantech and X Fab Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CMG Cleantech and X Fab
The main advantage of trading using opposite CMG Cleantech and X Fab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CMG Cleantech 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.CMG Cleantech vs. EPC Groupe | CMG Cleantech vs. Groupe Sfpi | CMG Cleantech vs. Baikowski SASU | CMG Cleantech vs. NSE 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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