Correlation Between X-FAB Silicon and SEEK

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

Diversification Opportunities for X-FAB Silicon and SEEK

0.39

Correlation Coefficient

X-FAB Silicon  SEEK

Weak diversification

The 3 months correlation between X-FAB and SEEK is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and SEEK Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEEK Limited 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 SEEK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEEK Limited has no effect on the direction of X-FAB Silicon i.e., X-FAB Silicon and SEEK go up and down completely randomly.

Pair Corralation between X-FAB Silicon and SEEK

Assuming the 90 days trading horizon X FAB Silicon Foundries is expected to generate 1.56 times more return on investment than SEEK. However, X-FAB Silicon is 1.56 times more volatile than SEEK Limited. It trades about 0.21 of its potential returns per unit of risk. SEEK Limited is currently generating about 0.06 per unit of risk. If you would invest  535.00  in X FAB Silicon Foundries on May 14, 2025 and sell it today you would earn a total of  178.00  from holding X FAB Silicon Foundries or generate 33.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

X FAB Silicon Foundries  vs.  SEEK Limited

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 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, X-FAB Silicon unveiled solid returns over the last few months and may actually be approaching a breakup point.

SEEK Limited

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in SEEK Limited are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, SEEK is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with X-FAB Silicon and SEEK

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

The idea behind X FAB Silicon Foundries and SEEK Limited 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..