Correlation Between SIVERS SEMICONDUCTORS and Deka MDAX

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

Diversification Opportunities for SIVERS SEMICONDUCTORS and Deka MDAX

0.37

Correlation Coefficient

SIVERS SEMICONDUCTORS  Deka MDAX

Weak diversification

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

Pair Corralation between SIVERS SEMICONDUCTORS and Deka MDAX

Assuming the 90 days horizon SIVERS SEMICONDUCTORS AB is expected to under-perform the Deka MDAX. In addition to that, SIVERS SEMICONDUCTORS is 5.66 times more volatile than Deka MDAX UCITS. It trades about -0.01 of its total potential returns per unit of risk. Deka MDAX UCITS is currently generating about -0.02 per unit of volatility. If you would invest  26,795  in Deka MDAX UCITS on October 6, 2024 and sell it today you would lose (2,880) from holding Deka MDAX UCITS or give up 10.75% of portfolio value over 90 days.

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

SIVERS SEMICONDUCTORS AB  vs.  Deka MDAX UCITS

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.

Deka MDAX UCITS

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with SIVERS SEMICONDUCTORS and Deka MDAX

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

The idea behind SIVERS SEMICONDUCTORS AB and Deka MDAX UCITS 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.