Correlation Between SIVERS SEMICONDUCTORS and Heineken Holding

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

Diversification Opportunities for SIVERS SEMICONDUCTORS and Heineken Holding

0.46

Correlation Coefficient

SIVERS SEMICONDUCTORS  Heineken Holding

Very weak diversification

The 3 months correlation between SIVERS and Heineken is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding SIVERS SEMICONDUCTORS AB and Heineken Holding NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heineken Holding 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 Heineken Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heineken Holding has no effect on the direction of SIVERS SEMICONDUCTORS i.e., SIVERS SEMICONDUCTORS and Heineken Holding go up and down completely randomly.

Pair Corralation between SIVERS SEMICONDUCTORS and Heineken Holding

Assuming the 90 days horizon SIVERS SEMICONDUCTORS AB is expected to generate 4.16 times more return on investment than Heineken Holding. However, SIVERS SEMICONDUCTORS is 4.16 times more volatile than Heineken Holding NV. It trades about 0.23 of its potential returns per unit of risk. Heineken Holding NV is currently generating about 0.15 per unit of risk. If you would invest  17.00  in SIVERS SEMICONDUCTORS AB on December 5, 2024 and sell it today you would earn a total of  26.00  from holding SIVERS SEMICONDUCTORS AB or generate 152.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

SIVERS SEMICONDUCTORS AB  vs.  Heineken Holding NV

SIVERS SEMICONDUCTORS

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SIVERS SEMICONDUCTORS AB are ranked lower than 18 (%) 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.

Heineken Holding

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Heineken Holding NV are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Heineken Holding reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SIVERS SEMICONDUCTORS and Heineken Holding

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

The idea behind SIVERS SEMICONDUCTORS AB and Heineken Holding NV 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.