Correlation Between X-FAB Silicon and FATFISH GROUP

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

Diversification Opportunities for X-FAB Silicon and FATFISH GROUP

-0.27

Correlation Coefficient

X-FAB Silicon  FATFISH GROUP

Very good diversification

The 3 months correlation between X-FAB and FATFISH is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and FATFISH GROUP LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FATFISH GROUP LTD 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 FATFISH GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FATFISH GROUP LTD has no effect on the direction of X-FAB Silicon i.e., X-FAB Silicon and FATFISH GROUP go up and down completely randomly.

Pair Corralation between X-FAB Silicon and FATFISH GROUP

Assuming the 90 days trading horizon X FAB Silicon Foundries is expected to under-perform the FATFISH GROUP. But the stock apears to be less risky and, when comparing its historical volatility, X FAB Silicon Foundries is 7.81 times less risky than FATFISH GROUP. The stock trades about -0.13 of its potential returns per unit of risk. The FATFISH GROUP LTD is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  0.45  in FATFISH GROUP LTD on December 29, 2024 and sell it today you would earn a total of  0.10  from holding FATFISH GROUP LTD or generate 22.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

X FAB Silicon Foundries  vs.  FATFISH GROUP LTD

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 fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

FATFISH GROUP LTD

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in FATFISH GROUP LTD are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, FATFISH GROUP reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with X-FAB Silicon and FATFISH GROUP

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

The idea behind X FAB Silicon Foundries and FATFISH GROUP LTD 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.