Correlation Between X FAB and RYMAN HEALTHCAR

Can any of the company-specific risk be diversified away by investing in both X FAB and RYMAN HEALTHCAR 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 and RYMAN HEALTHCAR 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 RYMAN HEALTHCAR, you can compare the effects of market volatilities on X FAB and RYMAN HEALTHCAR 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 with a short position of RYMAN HEALTHCAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of X FAB and RYMAN HEALTHCAR.

Diversification Opportunities for X FAB and RYMAN HEALTHCAR

0.67

Correlation Coefficient

X FAB  RYMAN HEALTHCAR

Poor diversification

The 3 months correlation between XFB and RYMAN is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and RYMAN HEALTHCAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RYMAN HEALTHCAR and X FAB 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 RYMAN HEALTHCAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RYMAN HEALTHCAR has no effect on the direction of X FAB i.e., X FAB and RYMAN HEALTHCAR go up and down completely randomly.

Pair Corralation between X FAB and RYMAN HEALTHCAR

Assuming the 90 days trading horizon X FAB Silicon Foundries is expected to generate 0.84 times more return on investment than RYMAN HEALTHCAR. However, X FAB Silicon Foundries is 1.19 times less risky than RYMAN HEALTHCAR. It trades about -0.02 of its potential returns per unit of risk. RYMAN HEALTHCAR is currently generating about -0.22 per unit of risk. If you would invest  480.00  in X FAB Silicon Foundries on December 21, 2024 and sell it today you would lose (25.00) from holding X FAB Silicon Foundries or give up 5.21% of portfolio value over 90 days.

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

X FAB Silicon Foundries  vs.  RYMAN HEALTHCAR

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

RYMAN HEALTHCAR

Risk-Adjusted Performance

Very Weak

Over the last 90 days RYMAN HEALTHCAR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with X FAB and RYMAN HEALTHCAR

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

The idea behind X FAB Silicon Foundries and RYMAN HEALTHCAR 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.