Correlation Between X-FAB Silicon and Everplay Group

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

Diversification Opportunities for X-FAB Silicon and Everplay Group

0.87

Correlation Coefficient

X-FAB Silicon  Everplay Group

Very poor diversification

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

Pair Corralation between X-FAB Silicon and Everplay Group

Assuming the 90 days trading horizon X-FAB Silicon is expected to generate 1.15 times less return on investment than Everplay Group. But when comparing it to its historical volatility, X FAB Silicon Foundries is 1.34 times less risky than Everplay Group. It trades about 0.23 of its potential returns per unit of risk. Everplay Group PLC is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  26,367  in Everplay Group PLC on April 25, 2025 and sell it today you would earn a total of  10,433  from holding Everplay Group PLC or generate 39.57% 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.  Everplay Group PLC

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.

Everplay Group PLC

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Everplay Group PLC are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Everplay Group unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with X-FAB Silicon and Everplay Group

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

The idea behind X FAB Silicon Foundries and Everplay Group PLC 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.