Correlation Between Entravision Communications and X FAB

Can any of the company-specific risk be diversified away by investing in both Entravision Communications 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 Entravision Communications and X FAB into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Entravision Communications and X FAB Silicon Foundries, you can compare the effects of market volatilities on Entravision Communications 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 Entravision Communications with a short position of X FAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Entravision Communications and X FAB.

Diversification Opportunities for Entravision Communications and X FAB

0.92

Correlation Coefficient

Entravision Communications  X FAB

Almost no diversification

The 3 months correlation between Entravision and XFB is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Entravision Communications 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 Entravision Communications 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 Entravision Communications 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 Entravision Communications i.e., Entravision Communications and X FAB go up and down completely randomly.

Pair Corralation between Entravision Communications and X FAB

Assuming the 90 days horizon Entravision Communications is expected to generate 1.25 times less return on investment than X FAB. In addition to that, Entravision Communications is 1.45 times more volatile than X FAB Silicon Foundries. It trades about 0.12 of its total potential returns per unit of risk. X FAB Silicon Foundries is currently generating about 0.22 per unit of volatility. If you would invest  480.00  in X FAB Silicon Foundries on April 24, 2025 and sell it today you would earn a total of  175.00  from holding X FAB Silicon Foundries or generate 36.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Entravision Communications  vs.  X FAB Silicon Foundries

Entravision Communications

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Entravision Communications are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Entravision Communications reported solid returns over the last few months and may actually be approaching a breakup point.

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 rather fragile fundamental drivers, X FAB exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Entravision Communications and X FAB

The main advantage of trading using opposite Entravision Communications and X FAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Entravision Communications 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 Entravision Communications 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.