Correlation Between Porvair Plc and X-FAB Silicon

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

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

Diversification Opportunities for Porvair Plc and X-FAB Silicon

-0.21

Correlation Coefficient

Porvair Plc  X-FAB Silicon

Very good diversification

The 3 months correlation between Porvair and X-FAB is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Porvair plc 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 Porvair Plc 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 Porvair plc are associated (or correlated) with X-FAB Silicon. 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 Porvair Plc i.e., Porvair Plc and X-FAB Silicon go up and down completely randomly.

Pair Corralation between Porvair Plc and X-FAB Silicon

Assuming the 90 days trading horizon Porvair Plc is expected to generate 18.65 times less return on investment than X-FAB Silicon. But when comparing it to its historical volatility, Porvair plc is 1.2 times less risky than X-FAB Silicon. It trades about 0.01 of its potential returns per unit of risk. X FAB Silicon Foundries is currently generating about 0.23 of returns per unit of risk over similar time horizon. 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 Against
Strength	Insignificant
Accuracy	96.88%
Values	Daily Returns

Porvair plc  vs.  X FAB Silicon Foundries

Porvair plc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Porvair plc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Porvair Plc is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

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.

Pair Trading with Porvair Plc and X-FAB Silicon

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

The idea behind Porvair plc 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .