Correlation Between X-FAB Silicon and Universal Music
Can any of the company-specific risk be diversified away by investing in both X-FAB Silicon and Universal Music 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 Universal Music 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 Universal Music Group, you can compare the effects of market volatilities on X-FAB Silicon and Universal Music 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 Universal Music. Check out your portfolio center. Please also check ongoing floating volatility patterns of X-FAB Silicon and Universal Music.
Diversification Opportunities for X-FAB Silicon and Universal Music
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between X-FAB and Universal is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and Universal Music Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Music Group 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 Universal Music. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Music Group has no effect on the direction of X-FAB Silicon i.e., X-FAB Silicon and Universal Music go up and down completely randomly.
Pair Corralation between X-FAB Silicon and Universal Music
Assuming the 90 days horizon X FAB Silicon Foundries is expected to under-perform the Universal Music. In addition to that, X-FAB Silicon is 2.11 times more volatile than Universal Music Group. It trades about -0.15 of its total potential returns per unit of risk. Universal Music Group is currently generating about -0.06 per unit of volatility. If you would invest 1,374 in Universal Music Group on August 31, 2025 and sell it today you would lose (101.00) from holding Universal Music Group or give up 7.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
X FAB Silicon Foundries vs. Universal Music Group
Performance |
| Timeline |
| X FAB Silicon |
| Universal Music Group |
X-FAB Silicon and Universal Music Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X-FAB Silicon and Universal Music
The main advantage of trading using opposite X-FAB Silicon and Universal Music positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X-FAB Silicon position performs unexpectedly, Universal Music 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 Universal Music will offset losses from the drop in Universal Music's long position.| X-FAB Silicon vs. Rogers Communications | X-FAB Silicon vs. Huahui Education Group | X-FAB Silicon vs. Lincoln Educational Services | X-FAB Silicon vs. Space Communication |
| Universal Music vs. Jinxin Technology Holding | Universal Music vs. Barrick Mining | Universal Music vs. Natural Beauty Bio Technology | Universal Music vs. BC Technology Group |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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