Correlation Between QINGCI GAMES and X FAB

Can any of the company-specific risk be diversified away by investing in both QINGCI GAMES and X FAB 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 QINGCI GAMES and X FAB into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between QINGCI GAMES INC and X FAB Silicon Foundries, you can compare the effects of market volatilities on QINGCI GAMES and X FAB 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 QINGCI GAMES with a short position of X FAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of QINGCI GAMES and X FAB.

Diversification Opportunities for QINGCI GAMES and X FAB

0.77

Correlation Coefficient

QINGCI GAMES  X FAB

Poor diversification

The 3 months correlation between QINGCI and XFB is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding QINGCI GAMES INC and X FAB Silicon Foundries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X FAB Silicon and QINGCI GAMES 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 QINGCI GAMES INC are associated (or correlated) with X FAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X FAB Silicon has no effect on the direction of QINGCI GAMES i.e., QINGCI GAMES and X FAB go up and down completely randomly.

Pair Corralation between QINGCI GAMES and X FAB

Assuming the 90 days horizon QINGCI GAMES INC is expected to generate 1.4 times more return on investment than X FAB. However, QINGCI GAMES is 1.4 times more volatile than X FAB Silicon Foundries. It trades about -0.01 of its potential returns per unit of risk. X FAB Silicon Foundries is currently generating about -0.03 per unit of risk. If you would invest  56.00  in QINGCI GAMES INC on October 26, 2024 and sell it today you would lose (22.00) from holding QINGCI GAMES INC or give up 39.29% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.8%
Values	Daily Returns

QINGCI GAMES INC  vs.  X FAB Silicon Foundries

QINGCI GAMES INC

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in QINGCI GAMES INC are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, QINGCI GAMES reported solid returns over the last few months and may actually be approaching a breakup point.

X FAB Silicon

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in X FAB Silicon Foundries are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental drivers, X FAB may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with QINGCI GAMES and X FAB

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

The idea behind QINGCI GAMES INC and X FAB Silicon Foundries 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.