Correlation Between SIVERS SEMICONDUCTORS and Cofina SGPS

Can any of the company-specific risk be diversified away by investing in both SIVERS SEMICONDUCTORS and Cofina SGPS 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 Cofina SGPS 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 Cofina SGPS SA, you can compare the effects of market volatilities on SIVERS SEMICONDUCTORS and Cofina SGPS 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 Cofina SGPS. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIVERS SEMICONDUCTORS and Cofina SGPS.

Diversification Opportunities for SIVERS SEMICONDUCTORS and Cofina SGPS

-0.53

Correlation Coefficient

SIVERS SEMICONDUCTORS  Cofina SGPS

Excellent diversification

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

Pair Corralation between SIVERS SEMICONDUCTORS and Cofina SGPS

Assuming the 90 days horizon SIVERS SEMICONDUCTORS AB is expected to generate 0.78 times more return on investment than Cofina SGPS. However, SIVERS SEMICONDUCTORS AB is 1.28 times less risky than Cofina SGPS. It trades about 0.0 of its potential returns per unit of risk. Cofina SGPS SA is currently generating about 0.0 per unit of risk. If you would invest  39.00  in SIVERS SEMICONDUCTORS AB on October 24, 2024 and sell it today you would lose (11.00) from holding SIVERS SEMICONDUCTORS AB or give up 28.21% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.78%
Values	Daily Returns

SIVERS SEMICONDUCTORS AB  vs.  Cofina SGPS SA

SIVERS SEMICONDUCTORS

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SIVERS SEMICONDUCTORS AB are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, SIVERS SEMICONDUCTORS reported solid returns over the last few months and may actually be approaching a breakup point.

Cofina SGPS SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cofina SGPS SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Cofina SGPS is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with SIVERS SEMICONDUCTORS and Cofina SGPS

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

The idea behind SIVERS SEMICONDUCTORS AB and Cofina SGPS SA 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.