Correlation Between X FAB and Glencore PLC
Can any of the company-specific risk be diversified away by investing in both X FAB and Glencore PLC 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 Glencore PLC 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 Glencore PLC, you can compare the effects of market volatilities on X FAB and Glencore PLC 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 Glencore PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of X FAB and Glencore PLC.
Diversification Opportunities for X FAB and Glencore PLC
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between XFB and Glencore is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and Glencore PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glencore PLC 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 Glencore PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glencore PLC has no effect on the direction of X FAB i.e., X FAB and Glencore PLC go up and down completely randomly.
Pair Corralation between X FAB and Glencore PLC
Assuming the 90 days trading horizon X FAB Silicon Foundries is expected to generate 1.63 times more return on investment than Glencore PLC. However, X FAB is 1.63 times more volatile than Glencore PLC. It trades about 0.0 of its potential returns per unit of risk. Glencore PLC is currently generating about -0.35 per unit of risk. If you would invest 509.00 in X FAB Silicon Foundries on October 9, 2024 and sell it today you would lose (2.00) from holding X FAB Silicon Foundries or give up 0.39% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
X FAB Silicon Foundries vs. Glencore PLC
Performance |
Timeline |
X FAB Silicon |
Glencore PLC |
X FAB and Glencore PLC Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with X FAB and Glencore PLC
The main advantage of trading using opposite X FAB and Glencore PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X FAB position performs unexpectedly, Glencore PLC 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 Glencore PLC will offset losses from the drop in Glencore PLC's long position.X FAB vs. Iridium Communications | X FAB vs. US Physical Therapy | X FAB vs. Cairo Communication SpA | X FAB vs. Siamgas And Petrochemicals |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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