Correlation Between Clean Power and X FAB
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 Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 96.92% |
Values | Daily Returns |
Clean Power Hydrogen vs. X FAB Silicon Foundries
Performance |
Timeline |
Clean Power Hydrogen |
X FAB Silicon |
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.Clean Power vs. Heavitree Brewery | Clean Power vs. Charter Communications Cl | Clean Power vs. Verizon Communications | Clean Power vs. Gaming Realms plc |
X FAB vs. Teradata Corp | X FAB vs. Public Storage | X FAB vs. Dentsply Sirona | X FAB vs. Fidelity National Information |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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