Correlation Between X-FAB Silicon and Canadian General

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

Diversification Opportunities for X-FAB Silicon and Canadian General

0.87

Correlation Coefficient

X-FAB Silicon  Canadian General

Very poor diversification

The 3 months correlation between X-FAB and Canadian is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and Canadian General Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian General Inv 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 Canadian General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian General Inv has no effect on the direction of X-FAB Silicon i.e., X-FAB Silicon and Canadian General go up and down completely randomly.

Pair Corralation between X-FAB Silicon and Canadian General

Assuming the 90 days trading horizon X FAB Silicon Foundries is expected to generate 1.93 times more return on investment than Canadian General. However, X-FAB Silicon is 1.93 times more volatile than Canadian General Investments. It trades about 0.23 of its potential returns per unit of risk. Canadian General Investments is currently generating about 0.28 per unit of risk. If you would invest  479.00  in X FAB Silicon Foundries on April 25, 2025 and sell it today you would earn a total of  173.00  from holding X FAB Silicon Foundries or generate 36.12% return on investment over 90 days.

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

X FAB Silicon Foundries  vs.  Canadian General Investments

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 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, X-FAB Silicon unveiled solid returns over the last few months and may actually be approaching a breakup point.

Canadian General Inv

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Canadian General Investments are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Canadian General exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with X-FAB Silicon and Canadian General

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

The idea behind X FAB Silicon Foundries and Canadian General Investments 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.