Correlation Between X FAB and GLADSTONE LAND

Can any of the company-specific risk be diversified away by investing in both X FAB and GLADSTONE LAND 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 GLADSTONE LAND 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 GLADSTONE LAND L 001, you can compare the effects of market volatilities on X FAB and GLADSTONE LAND 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 GLADSTONE LAND. Check out your portfolio center. Please also check ongoing floating volatility patterns of X FAB and GLADSTONE LAND.

Diversification Opportunities for X FAB and GLADSTONE LAND

0.11

Correlation Coefficient

X FAB  GLADSTONE LAND

Average diversification

The 3 months correlation between XFB and GLADSTONE is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and GLADSTONE LAND L 001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GLADSTONE LAND L 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 GLADSTONE LAND. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GLADSTONE LAND L has no effect on the direction of X FAB i.e., X FAB and GLADSTONE LAND go up and down completely randomly.

Pair Corralation between X FAB and GLADSTONE LAND

Assuming the 90 days trading horizon X FAB Silicon Foundries is expected to generate 1.48 times more return on investment than GLADSTONE LAND. However, X FAB is 1.48 times more volatile than GLADSTONE LAND L 001. It trades about -0.01 of its potential returns per unit of risk. GLADSTONE LAND L 001 is currently generating about -0.05 per unit of risk. If you would invest  738.00  in X FAB Silicon Foundries on October 10, 2024 and sell it today you would lose (209.00) from holding X FAB Silicon Foundries or give up 28.32% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

X FAB Silicon Foundries  vs.  GLADSTONE LAND L 001

X FAB Silicon

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days X FAB Silicon Foundries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental drivers, X FAB is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

GLADSTONE LAND L

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GLADSTONE LAND L 001 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with X FAB and GLADSTONE LAND

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

The idea behind X FAB Silicon Foundries and GLADSTONE LAND L 001 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.