Correlation Between X Fab and SIDETRADE

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

By analyzing existing cross correlation between X Fab Silicon and SIDETRADE EO 1, you can compare the effects of market volatilities on X Fab and SIDETRADE 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 X Fab with a short position of SIDETRADE. Check out your portfolio center. Please also check ongoing floating volatility patterns of X Fab and SIDETRADE.

Diversification Opportunities for X Fab and SIDETRADE

0.56

Correlation Coefficient

X Fab  SIDETRADE

Very weak diversification

The 3 months correlation between XFB and SIDETRADE is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding X Fab Silicon and SIDETRADE EO 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIDETRADE EO 1 and X Fab 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 X Fab Silicon are associated (or correlated) with SIDETRADE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIDETRADE EO 1 has no effect on the direction of X Fab i.e., X Fab and SIDETRADE go up and down completely randomly.

Pair Corralation between X Fab and SIDETRADE

If you would invest  0.00  in X Fab Silicon on April 6, 2025 and sell it today you would earn a total of  0.00  from holding X Fab Silicon or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.2%
Values	Daily Returns

X Fab Silicon  vs.  SIDETRADE EO 1

X Fab Silicon

Risk-Adjusted Performance

Solid

Over the last 90 days X Fab Silicon has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly weak basic indicators, X Fab reported solid returns over the last few months and may actually be approaching a breakup point.

SIDETRADE EO 1

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SIDETRADE EO 1 are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, SIDETRADE reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with X Fab and SIDETRADE

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

The idea behind X Fab Silicon and SIDETRADE EO 1 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 Transaction History module to view history of all your transactions and understand their impact on performance.