Correlation Between X-FAB Silicon and COPAUR MINERALS

Can any of the company-specific risk be diversified away by investing in both X-FAB Silicon and COPAUR MINERALS 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 Silicon and COPAUR MINERALS 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 COPAUR MINERALS INC, you can compare the effects of market volatilities on X-FAB Silicon and COPAUR MINERALS 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 Silicon with a short position of COPAUR MINERALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of X-FAB Silicon and COPAUR MINERALS.

Diversification Opportunities for X-FAB Silicon and COPAUR MINERALS

-0.29

Correlation Coefficient

X-FAB Silicon  COPAUR MINERALS

Very good diversification

The 3 months correlation between X-FAB and COPAUR is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and COPAUR MINERALS INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COPAUR MINERALS INC and X-FAB Silicon 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 COPAUR MINERALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COPAUR MINERALS INC has no effect on the direction of X-FAB Silicon i.e., X-FAB Silicon and COPAUR MINERALS go up and down completely randomly.

Pair Corralation between X-FAB Silicon and COPAUR MINERALS

Assuming the 90 days trading horizon X FAB Silicon Foundries is expected to under-perform the COPAUR MINERALS. But the stock apears to be less risky and, when comparing its historical volatility, X FAB Silicon Foundries is 3.23 times less risky than COPAUR MINERALS. The stock trades about -0.04 of its potential returns per unit of risk. The COPAUR MINERALS INC is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  6.90  in COPAUR MINERALS INC on December 20, 2024 and sell it today you would earn a total of  1.14  from holding COPAUR MINERALS INC or generate 16.52% return on investment over 90 days.

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

X FAB Silicon Foundries  vs.  COPAUR MINERALS INC

X FAB Silicon

Risk-Adjusted Performance

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 latest fragile performance, the Stock's fundamental drivers remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

COPAUR MINERALS INC

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in COPAUR MINERALS INC are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain fundamental indicators, COPAUR MINERALS reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with X-FAB Silicon and COPAUR MINERALS

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

The idea behind X FAB Silicon Foundries and COPAUR MINERALS INC 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..