Correlation Between X-FAB Silicon and First Citizens

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

Diversification Opportunities for X-FAB Silicon and First Citizens

-0.89

Correlation Coefficient

X-FAB Silicon  First Citizens

Pay attention - limited upside

The 3 months correlation between X-FAB and First is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and The First Citizens in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Citizens 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 First Citizens. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Citizens has no effect on the direction of X-FAB Silicon i.e., X-FAB Silicon and First Citizens go up and down completely randomly.

Pair Corralation between X-FAB Silicon and First Citizens

Assuming the 90 days horizon X FAB Silicon Foundries is expected to generate 0.2 times more return on investment than First Citizens. However, X FAB Silicon Foundries is 5.1 times less risky than First Citizens. It trades about 0.2 of its potential returns per unit of risk. The First Citizens is currently generating about -0.15 per unit of risk. If you would invest  550.00  in X FAB Silicon Foundries on April 30, 2025 and sell it today you would earn a total of  178.00  from holding X FAB Silicon Foundries or generate 32.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	68.85%
Values	Daily Returns

X FAB Silicon Foundries  vs.  The First Citizens

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 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental drivers, X-FAB Silicon reported solid returns over the last few months and may actually be approaching a breakup point.

First Citizens

Risk-Adjusted Performance

Very Weak

Over the last 90 days The First Citizens has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's fundamental indicators remain quite persistent which may send shares a bit higher in August 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with X-FAB Silicon and First Citizens

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

The idea behind X FAB Silicon Foundries and The First Citizens 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.