Correlation Between X-FAB Silicon and Gruppo Mutuionline

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

Diversification Opportunities for X-FAB Silicon and Gruppo Mutuionline

-0.06

Correlation Coefficient

X-FAB Silicon  Gruppo Mutuionline

Good diversification

The 3 months correlation between X-FAB and Gruppo is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and Gruppo Mutuionline SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gruppo Mutuionline SpA 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 Gruppo Mutuionline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gruppo Mutuionline SpA has no effect on the direction of X-FAB Silicon i.e., X-FAB Silicon and Gruppo Mutuionline go up and down completely randomly.

Pair Corralation between X-FAB Silicon and Gruppo Mutuionline

Assuming the 90 days trading horizon X FAB Silicon Foundries is expected to under-perform the Gruppo Mutuionline. In addition to that, X-FAB Silicon is 1.26 times more volatile than Gruppo Mutuionline SpA. It trades about -0.02 of its total potential returns per unit of risk. Gruppo Mutuionline SpA is currently generating about 0.04 per unit of volatility. If you would invest  2,821  in Gruppo Mutuionline SpA on October 9, 2024 and sell it today you would earn a total of  844.00  from holding Gruppo Mutuionline SpA or generate 29.92% 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.  Gruppo Mutuionline SpA

X FAB Silicon

Risk-Adjusted Performance

0 of 100

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 comparatively stable basic indicators, X-FAB Silicon is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Gruppo Mutuionline SpA

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gruppo Mutuionline SpA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Gruppo Mutuionline unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with X-FAB Silicon and Gruppo Mutuionline

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

The idea behind X FAB Silicon Foundries and Gruppo Mutuionline SpA 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.