Correlation Between SIVERS SEMICONDUCTORS and Elixinol Wellness

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

Diversification Opportunities for SIVERS SEMICONDUCTORS and Elixinol Wellness

-0.19

Correlation Coefficient

SIVERS SEMICONDUCTORS  Elixinol Wellness

Good diversification

The 3 months correlation between SIVERS and Elixinol is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding SIVERS SEMICONDUCTORS AB and Elixinol Wellness Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elixinol Wellness 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 Elixinol Wellness. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elixinol Wellness has no effect on the direction of SIVERS SEMICONDUCTORS i.e., SIVERS SEMICONDUCTORS and Elixinol Wellness go up and down completely randomly.

Pair Corralation between SIVERS SEMICONDUCTORS and Elixinol Wellness

Assuming the 90 days horizon SIVERS SEMICONDUCTORS AB is expected to under-perform the Elixinol Wellness. But the stock apears to be less risky and, when comparing its historical volatility, SIVERS SEMICONDUCTORS AB is 7.2 times less risky than Elixinol Wellness. The stock trades about -0.02 of its potential returns per unit of risk. The Elixinol Wellness Limited is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  0.80  in Elixinol Wellness Limited on October 9, 2024 and sell it today you would earn a total of  1.50  from holding Elixinol Wellness Limited or generate 187.5% 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.  Elixinol Wellness Limited

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.

Elixinol Wellness

Risk-Adjusted Performance

11 of 100

Good

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

Pair Trading with SIVERS SEMICONDUCTORS and Elixinol Wellness

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

The idea behind SIVERS SEMICONDUCTORS AB and Elixinol Wellness 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..