Correlation Between SIVERS SEMICONDUCTORS and Deka Deutsche

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

Diversification Opportunities for SIVERS SEMICONDUCTORS and Deka Deutsche

-0.11

Correlation Coefficient

SIVERS SEMICONDUCTORS  Deka Deutsche

Good diversification

The 3 months correlation between SIVERS and Deka is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding SIVERS SEMICONDUCTORS AB and Deka Deutsche Brse in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deka Deutsche Brse 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 Deka Deutsche. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deka Deutsche Brse has no effect on the direction of SIVERS SEMICONDUCTORS i.e., SIVERS SEMICONDUCTORS and Deka Deutsche go up and down completely randomly.

Pair Corralation between SIVERS SEMICONDUCTORS and Deka Deutsche

Assuming the 90 days horizon SIVERS SEMICONDUCTORS AB is expected to generate 38.23 times more return on investment than Deka Deutsche. However, SIVERS SEMICONDUCTORS is 38.23 times more volatile than Deka Deutsche Brse. It trades about 0.08 of its potential returns per unit of risk. Deka Deutsche Brse is currently generating about -0.01 per unit of risk. If you would invest  28.00  in SIVERS SEMICONDUCTORS AB on December 24, 2024 and sell it today you would earn a total of  7.00  from holding SIVERS SEMICONDUCTORS AB or generate 25.0% 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.  Deka Deutsche Brse

SIVERS SEMICONDUCTORS

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SIVERS SEMICONDUCTORS AB are ranked lower than 6 (%) 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.

Deka Deutsche Brse

Risk-Adjusted Performance

Very Weak

Over the last 90 days Deka Deutsche Brse has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Deka Deutsche is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with SIVERS SEMICONDUCTORS and Deka Deutsche

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

The idea behind SIVERS SEMICONDUCTORS AB and Deka Deutsche Brse 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.