Correlation Between X FAB and Batm Advanced

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

Diversification Opportunities for X FAB and Batm Advanced

0.18

Correlation Coefficient

X FAB  Batm Advanced

Average diversification

The 3 months correlation between 0ROZ and Batm is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and Batm Advanced Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Batm Advanced Commun 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 Batm Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Batm Advanced Commun has no effect on the direction of X FAB i.e., X FAB and Batm Advanced go up and down completely randomly.

Pair Corralation between X FAB and Batm Advanced

Assuming the 90 days trading horizon X FAB Silicon Foundries is expected to generate 0.98 times more return on investment than Batm Advanced. However, X FAB Silicon Foundries is 1.02 times less risky than Batm Advanced. It trades about 0.32 of its potential returns per unit of risk. Batm Advanced Communications is currently generating about 0.09 per unit of risk. If you would invest  406.00  in X FAB Silicon Foundries on April 20, 2025 and sell it today you would earn a total of  265.00  from holding X FAB Silicon Foundries or generate 65.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.88%
Values	Daily Returns

X FAB Silicon Foundries  vs.  Batm Advanced Communications

X FAB Silicon

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in X FAB Silicon Foundries are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, X FAB unveiled solid returns over the last few months and may actually be approaching a breakup point.

Batm Advanced Commun

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Batm Advanced Communications are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Batm Advanced exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with X FAB and Batm Advanced

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

The idea behind X FAB Silicon Foundries and Batm Advanced Communications 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.