Correlation Between X-FAB Silicon and CHRYSALIS INVESTMENTS

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

Diversification Opportunities for X-FAB Silicon and CHRYSALIS INVESTMENTS

0.27

Correlation Coefficient

X-FAB Silicon  CHRYSALIS INVESTMENTS

Modest diversification

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

Pair Corralation between X-FAB Silicon and CHRYSALIS INVESTMENTS

Assuming the 90 days trading horizon X FAB Silicon Foundries is expected to under-perform the CHRYSALIS INVESTMENTS. In addition to that, X-FAB Silicon is 1.41 times more volatile than CHRYSALIS INVESTMENTS LTD. It trades about -0.06 of its total potential returns per unit of risk. CHRYSALIS INVESTMENTS LTD is currently generating about -0.01 per unit of volatility. If you would invest  121.00  in CHRYSALIS INVESTMENTS LTD on December 23, 2024 and sell it today you would lose (3.00) from holding CHRYSALIS INVESTMENTS LTD or give up 2.48% 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.  CHRYSALIS INVESTMENTS 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 latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

CHRYSALIS INVESTMENTS LTD

Risk-Adjusted Performance

Very Weak

Over the last 90 days CHRYSALIS INVESTMENTS LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, CHRYSALIS INVESTMENTS is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with X-FAB Silicon and CHRYSALIS INVESTMENTS

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

The idea behind X FAB Silicon Foundries and CHRYSALIS INVESTMENTS 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.

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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.