Correlation Between X FAB and VIRGIN WINES

Can any of the company-specific risk be diversified away by investing in both X FAB and VIRGIN WINES 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 VIRGIN WINES 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 VIRGIN WINES UK, you can compare the effects of market volatilities on X FAB and VIRGIN WINES 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 VIRGIN WINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of X FAB and VIRGIN WINES.

Diversification Opportunities for X FAB and VIRGIN WINES

0.0

Correlation Coefficient

X FAB  VIRGIN WINES

Pay attention - limited upside

The 3 months correlation between XFB and VIRGIN is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and VIRGIN WINES UK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VIRGIN WINES UK 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 Foundries are associated (or correlated) with VIRGIN WINES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VIRGIN WINES UK has no effect on the direction of X FAB i.e., X FAB and VIRGIN WINES go up and down completely randomly.

Pair Corralation between X FAB and VIRGIN WINES

If you would invest  415.00  in X FAB Silicon Foundries on September 5, 2024 and sell it today you would earn a total of  9.00  from holding X FAB Silicon Foundries or generate 2.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	91.3%
Values	Daily Returns

X FAB Silicon Foundries  vs.  VIRGIN WINES UK

X FAB Silicon

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days X FAB Silicon Foundries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's fundamental drivers remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

VIRGIN WINES UK

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VIRGIN WINES UK has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, VIRGIN WINES is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with X FAB and VIRGIN WINES

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

The idea behind X FAB Silicon Foundries and VIRGIN WINES UK 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.