Correlation Between SIVERS SEMICONDUCTORS and Caixabank Seleccin

Can any of the company-specific risk be diversified away by investing in both SIVERS SEMICONDUCTORS and Caixabank Seleccin 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 SIVERS SEMICONDUCTORS and Caixabank Seleccin into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SIVERS SEMICONDUCTORS AB and Caixabank Seleccin Tendencias, you can compare the effects of market volatilities on SIVERS SEMICONDUCTORS and Caixabank Seleccin 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 SIVERS SEMICONDUCTORS with a short position of Caixabank Seleccin. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIVERS SEMICONDUCTORS and Caixabank Seleccin.

Diversification Opportunities for SIVERS SEMICONDUCTORS and Caixabank Seleccin

-0.53

Correlation Coefficient

SIVERS SEMICONDUCTORS  Caixabank Seleccin

Excellent diversification

The 3 months correlation between SIVERS and Caixabank is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding SIVERS SEMICONDUCTORS AB and Caixabank Seleccin Tendencias in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caixabank Seleccin and SIVERS SEMICONDUCTORS 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 SIVERS SEMICONDUCTORS AB are associated (or correlated) with Caixabank Seleccin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caixabank Seleccin has no effect on the direction of SIVERS SEMICONDUCTORS i.e., SIVERS SEMICONDUCTORS and Caixabank Seleccin go up and down completely randomly.

Pair Corralation between SIVERS SEMICONDUCTORS and Caixabank Seleccin

Assuming the 90 days horizon SIVERS SEMICONDUCTORS AB is expected to generate 12.96 times more return on investment than Caixabank Seleccin. However, SIVERS SEMICONDUCTORS is 12.96 times more volatile than Caixabank Seleccin Tendencias. It trades about 0.04 of its potential returns per unit of risk. Caixabank Seleccin Tendencias is currently generating about 0.05 per unit of risk. If you would invest  31.00  in SIVERS SEMICONDUCTORS AB on October 22, 2024 and sell it today you would lose (2.00) from holding SIVERS SEMICONDUCTORS AB or give up 6.45% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.0%
Values	Daily Returns

SIVERS SEMICONDUCTORS AB  vs.  Caixabank Seleccin Tendencias

SIVERS SEMICONDUCTORS

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SIVERS SEMICONDUCTORS AB are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, SIVERS SEMICONDUCTORS reported solid returns over the last few months and may actually be approaching a breakup point.

Caixabank Seleccin

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Caixabank Seleccin Tendencias are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Caixabank Seleccin is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with SIVERS SEMICONDUCTORS and Caixabank Seleccin

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

The idea behind SIVERS SEMICONDUCTORS AB and Caixabank Seleccin Tendencias 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.