Correlation Between X FAB and Reliance Industries
Can any of the company-specific risk be diversified away by investing in both X FAB and Reliance Industries 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 Reliance Industries 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 Reliance Industries Limited, you can compare the effects of market volatilities on X FAB and Reliance Industries 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 Reliance Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of X FAB and Reliance Industries.
Diversification Opportunities for X FAB and Reliance Industries
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 0ROZ and Reliance is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and Reliance Industries Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reliance Industries 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 Reliance Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reliance Industries has no effect on the direction of X FAB i.e., X FAB and Reliance Industries go up and down completely randomly.
Pair Corralation between X FAB and Reliance Industries
Assuming the 90 days trading horizon X FAB Silicon Foundries is expected to generate 2.09 times more return on investment than Reliance Industries. However, X FAB is 2.09 times more volatile than Reliance Industries Limited. It trades about 0.06 of its potential returns per unit of risk. Reliance Industries Limited is currently generating about 0.05 per unit of risk. If you would invest 630.00 in X FAB Silicon Foundries on July 24, 2025 and sell it today you would earn a total of 49.00 from holding X FAB Silicon Foundries or generate 7.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
X FAB Silicon Foundries vs. Reliance Industries Limited
Performance |
| Timeline |
| X FAB Silicon |
| Reliance Industries |
X FAB and Reliance Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X FAB and Reliance Industries
The main advantage of trading using opposite X FAB and Reliance Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X FAB position performs unexpectedly, Reliance Industries 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 Reliance Industries will offset losses from the drop in Reliance Industries' long position.| X FAB vs. Samsung Electronics Co | X FAB vs. Samsung Electronics Co | X FAB vs. Samsung Electronics Co | X FAB vs. Toyota Motor Corp |
| Reliance Industries vs. Darden Restaurants | Reliance Industries vs. Gaztransport et Technigaz | Reliance Industries vs. Atalaya Mining | Reliance Industries vs. Caledonia Mining |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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