Correlation Between X-FAB Silicon and SCOTT TECHNOLOGY

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

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

Diversification Opportunities for X-FAB Silicon and SCOTT TECHNOLOGY

0.07

Correlation Coefficient

X-FAB Silicon  SCOTT TECHNOLOGY

Significant diversification

The 3 months correlation between X-FAB and SCOTT is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and SCOTT TECHNOLOGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCOTT TECHNOLOGY and X-FAB Silicon 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 Foundries are associated (or correlated) with SCOTT TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCOTT TECHNOLOGY has no effect on the direction of X-FAB Silicon i.e., X-FAB Silicon and SCOTT TECHNOLOGY go up and down completely randomly.

Pair Corralation between X-FAB Silicon and SCOTT TECHNOLOGY

Assuming the 90 days trading horizon X FAB Silicon Foundries is expected to generate 1.29 times more return on investment than SCOTT TECHNOLOGY. However, X-FAB Silicon is 1.29 times more volatile than SCOTT TECHNOLOGY. It trades about 0.19 of its potential returns per unit of risk. SCOTT TECHNOLOGY is currently generating about 0.07 per unit of risk. If you would invest  422.00  in X FAB Silicon Foundries on March 24, 2025 and sell it today you would earn a total of  155.00  from holding X FAB Silicon Foundries or generate 36.73% return on investment over 90 days.

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

X FAB Silicon Foundries  vs.  SCOTT TECHNOLOGY

X FAB Silicon

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in X FAB Silicon Foundries are ranked lower than 14 (%) 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.

SCOTT TECHNOLOGY

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SCOTT TECHNOLOGY are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical indicators, SCOTT TECHNOLOGY may actually be approaching a critical reversion point that can send shares even higher in July 2025.

Pair Trading with X-FAB Silicon and SCOTT TECHNOLOGY

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

The idea behind X FAB Silicon Foundries and SCOTT TECHNOLOGY 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.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.