Correlation Between X-FAB Silicon and AS Latvijas

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

Diversification Opportunities for X-FAB Silicon and AS Latvijas

0.0

Correlation Coefficient

X-FAB Silicon  AS Latvijas

Pay attention - limited upside

The 3 months correlation between X-FAB and UM9 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and AS Latvijas balzams in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AS Latvijas balzams 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 AS Latvijas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AS Latvijas balzams has no effect on the direction of X-FAB Silicon i.e., X-FAB Silicon and AS Latvijas go up and down completely randomly.

Pair Corralation between X-FAB Silicon and AS Latvijas

If you would invest  0.00  in AS Latvijas balzams on December 20, 2024 and sell it today you would earn a total of  0.00  from holding AS Latvijas balzams or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.67%
Values	Daily Returns

X FAB Silicon Foundries  vs.  AS Latvijas balzams

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 rather sound fundamental drivers, X-FAB Silicon is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

AS Latvijas balzams

Risk-Adjusted Performance

Modest

Over the last 90 days AS Latvijas balzams has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, AS Latvijas is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with X-FAB Silicon and AS Latvijas

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

The idea behind X FAB Silicon Foundries and AS Latvijas balzams 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 Stocks Directory module to find actively traded stocks across global markets.