Correlation Between X Fab and Fill Up

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

By analyzing existing cross correlation between X Fab Silicon and Fill Up Media, you can compare the effects of market volatilities on X Fab and Fill Up 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 Fill Up. Check out your portfolio center. Please also check ongoing floating volatility patterns of X Fab and Fill Up.

Diversification Opportunities for X Fab and Fill Up

0.49

Correlation Coefficient

X Fab  Fill Up

Very weak diversification

The 3 months correlation between XFAB and Fill is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding X Fab Silicon and Fill Up Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fill Up Media 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 are associated (or correlated) with Fill Up. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fill Up Media has no effect on the direction of X Fab i.e., X Fab and Fill Up go up and down completely randomly.

Pair Corralation between X Fab and Fill Up

Assuming the 90 days trading horizon X Fab Silicon is expected to generate 2.91 times more return on investment than Fill Up. However, X Fab is 2.91 times more volatile than Fill Up Media. It trades about -0.01 of its potential returns per unit of risk. Fill Up Media is currently generating about -0.22 per unit of risk. If you would invest  503.00  in X Fab Silicon on October 26, 2024 and sell it today you would lose (5.00) from holding X Fab Silicon or give up 0.99% of portfolio value over 90 days.

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

X Fab Silicon  vs.  Fill Up Media

X Fab Silicon

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in X Fab Silicon are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, X Fab may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Fill Up Media

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fill Up Media are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Fill Up may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with X Fab and Fill Up

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

The idea behind X Fab Silicon and Fill Up Media 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.

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.