Correlation Between X Fab and Compagnie Industrielle

Can any of the company-specific risk be diversified away by investing in both X Fab and Compagnie Industrielle 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 Compagnie Industrielle 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 Compagnie Industrielle et, you can compare the effects of market volatilities on X Fab and Compagnie Industrielle 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 Compagnie Industrielle. Check out your portfolio center. Please also check ongoing floating volatility patterns of X Fab and Compagnie Industrielle.

Diversification Opportunities for X Fab and Compagnie Industrielle

0.07

Correlation Coefficient

X Fab  Compagnie Industrielle

Significant diversification

The 3 months correlation between XFAB and Compagnie is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding X Fab Silicon and Compagnie Industrielle et in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie Industrielle 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 Compagnie Industrielle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie Industrielle has no effect on the direction of X Fab i.e., X Fab and Compagnie Industrielle go up and down completely randomly.

Pair Corralation between X Fab and Compagnie Industrielle

Assuming the 90 days trading horizon X Fab Silicon is expected to under-perform the Compagnie Industrielle. In addition to that, X Fab is 1.19 times more volatile than Compagnie Industrielle et. It trades about -0.09 of its total potential returns per unit of risk. Compagnie Industrielle et is currently generating about -0.01 per unit of volatility. If you would invest  6,100  in Compagnie Industrielle et on December 25, 2024 and sell it today you would lose (150.00) from holding Compagnie Industrielle et or give up 2.46% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

X Fab Silicon  vs.  Compagnie Industrielle et

X Fab Silicon

Risk-Adjusted Performance

Very Weak

Over the last 90 days X Fab Silicon has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Compagnie Industrielle

Risk-Adjusted Performance

Very Weak

Over the last 90 days Compagnie Industrielle et has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Compagnie Industrielle is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with X Fab and Compagnie Industrielle

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

The idea behind X Fab Silicon and Compagnie Industrielle et 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 Global Correlations module to find global opportunities by holding instruments from different markets.