Correlation Between SIVERS SEMICONDUCTORS and CAIRN HOMES

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

Diversification Opportunities for SIVERS SEMICONDUCTORS and CAIRN HOMES

-0.37

Correlation Coefficient

SIVERS SEMICONDUCTORS  CAIRN HOMES

Very good diversification

The 3 months correlation between SIVERS and CAIRN is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding SIVERS SEMICONDUCTORS AB and CAIRN HOMES EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAIRN HOMES EO 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 CAIRN HOMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAIRN HOMES EO has no effect on the direction of SIVERS SEMICONDUCTORS i.e., SIVERS SEMICONDUCTORS and CAIRN HOMES go up and down completely randomly.

Pair Corralation between SIVERS SEMICONDUCTORS and CAIRN HOMES

Assuming the 90 days horizon SIVERS SEMICONDUCTORS AB is expected to under-perform the CAIRN HOMES. In addition to that, SIVERS SEMICONDUCTORS is 2.6 times more volatile than CAIRN HOMES EO. It trades about -0.02 of its total potential returns per unit of risk. CAIRN HOMES EO is currently generating about 0.1 per unit of volatility. If you would invest  166.00  in CAIRN HOMES EO on October 9, 2024 and sell it today you would earn a total of  70.00  from holding CAIRN HOMES EO or generate 42.17% return on investment over 90 days.

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

SIVERS SEMICONDUCTORS AB  vs.  CAIRN HOMES EO

SIVERS SEMICONDUCTORS

Risk-Adjusted Performance

0 of 100

Very Weak

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

CAIRN HOMES EO

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CAIRN HOMES EO are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, CAIRN HOMES reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SIVERS SEMICONDUCTORS and CAIRN HOMES

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

The idea behind SIVERS SEMICONDUCTORS AB and CAIRN HOMES EO 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..