Correlation Between QUALCOMM Incorporated and X Fab

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

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

Diversification Opportunities for QUALCOMM Incorporated and X Fab

0.67

Correlation Coefficient

QUALCOMM Incorporated  X Fab

Poor diversification

The 3 months correlation between QUALCOMM and XFB is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding QUALCOMM Incorporated and X Fab Silicon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X Fab Silicon and QUALCOMM Incorporated 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 QUALCOMM Incorporated 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 QUALCOMM Incorporated i.e., QUALCOMM Incorporated and X Fab go up and down completely randomly.

Pair Corralation between QUALCOMM Incorporated and X Fab

Assuming the 90 days horizon QUALCOMM Incorporated is expected to generate 5.18 times less return on investment than X Fab. But when comparing it to its historical volatility, QUALCOMM Incorporated is 1.88 times less risky than X Fab. It trades about 0.11 of its potential returns per unit of risk. X Fab Silicon is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest  398.00  in X Fab Silicon on April 21, 2025 and sell it today you would earn a total of  295.00  from holding X Fab Silicon or generate 74.12% return on investment over 90 days.

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

QUALCOMM Incorporated  vs.  X Fab Silicon

QUALCOMM Incorporated

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in QUALCOMM Incorporated are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, QUALCOMM Incorporated may actually be approaching a critical reversion point that can send shares even higher in August 2025.

X Fab Silicon

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in X Fab Silicon are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, X Fab reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with QUALCOMM Incorporated and X Fab

The main advantage of trading using opposite QUALCOMM Incorporated and X Fab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QUALCOMM Incorporated 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 QUALCOMM Incorporated and X Fab Silicon 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.