Correlation Between X-FAB Silicon and PLAYTIKA HOLDING

Can any of the company-specific risk be diversified away by investing in both X-FAB Silicon and PLAYTIKA HOLDING 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 PLAYTIKA HOLDING 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 PLAYTIKA HOLDING DL 01, you can compare the effects of market volatilities on X-FAB Silicon and PLAYTIKA HOLDING 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 PLAYTIKA HOLDING. Check out your portfolio center. Please also check ongoing floating volatility patterns of X-FAB Silicon and PLAYTIKA HOLDING.

Diversification Opportunities for X-FAB Silicon and PLAYTIKA HOLDING

-0.11

Correlation Coefficient

X-FAB Silicon  PLAYTIKA HOLDING

Good diversification

The 3 months correlation between X-FAB and PLAYTIKA is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and PLAYTIKA HOLDING DL 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYTIKA HOLDING 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 PLAYTIKA HOLDING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAYTIKA HOLDING has no effect on the direction of X-FAB Silicon i.e., X-FAB Silicon and PLAYTIKA HOLDING go up and down completely randomly.

Pair Corralation between X-FAB Silicon and PLAYTIKA HOLDING

Assuming the 90 days trading horizon X FAB Silicon Foundries is expected to generate 1.17 times more return on investment than PLAYTIKA HOLDING. However, X-FAB Silicon is 1.17 times more volatile than PLAYTIKA HOLDING DL 01. It trades about -0.05 of its potential returns per unit of risk. PLAYTIKA HOLDING DL 01 is currently generating about -0.18 per unit of risk. If you would invest  491.00  in X FAB Silicon Foundries on December 2, 2024 and sell it today you would lose (35.00) from holding X FAB Silicon Foundries or give up 7.13% of portfolio value over 90 days.

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

X FAB Silicon Foundries  vs.  PLAYTIKA HOLDING DL 01

X FAB Silicon

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in X FAB Silicon Foundries are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, X-FAB Silicon may actually be approaching a critical reversion point that can send shares even higher in April 2025.

PLAYTIKA HOLDING

Risk-Adjusted Performance

Very Weak

Over the last 90 days PLAYTIKA HOLDING DL 01 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with X-FAB Silicon and PLAYTIKA HOLDING

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

The idea behind X FAB Silicon Foundries and PLAYTIKA HOLDING DL 01 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..