Correlation Between Clean Power and X FAB

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Can any of the company-specific risk be diversified away by investing in both Clean Power 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 Clean Power and X FAB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clean Power Hydrogen and X FAB Silicon Foundries, you can compare the effects of market volatilities on Clean Power 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 Clean Power with a short position of X FAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clean Power and X FAB.

Diversification Opportunities for Clean Power and X FAB

-0.65
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Clean and 0ROZ is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Clean Power Hydrogen 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 Clean Power 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 Clean Power Hydrogen 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 Clean Power i.e., Clean Power and X FAB go up and down completely randomly.

Pair Corralation between Clean Power and X FAB

Assuming the 90 days trading horizon Clean Power Hydrogen is expected to under-perform the X FAB. But the stock apears to be less risky and, when comparing its historical volatility, Clean Power Hydrogen is 1.02 times less risky than X FAB. The stock trades about -0.1 of its potential returns per unit of risk. The X FAB Silicon Foundries is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest  406.00  in X FAB Silicon Foundries on April 21, 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 Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy96.92%
ValuesDaily Returns

Clean Power Hydrogen  vs.  X FAB Silicon Foundries

 Performance 
       Timeline  
Clean Power Hydrogen 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Clean Power Hydrogen has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in August 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
X FAB Silicon 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
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 uncertain basic indicators, X FAB unveiled solid returns over the last few months and may actually be approaching a breakup point.

Clean Power and X FAB Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Clean Power and X FAB

The main advantage of trading using opposite Clean Power and X FAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clean Power 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 Clean Power Hydrogen 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.
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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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.

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