Correlation Between SIVERS SEMICONDUCTORS and CTS Eventim

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

Diversification Opportunities for SIVERS SEMICONDUCTORS and CTS Eventim

0.45

Correlation Coefficient

SIVERS SEMICONDUCTORS  CTS Eventim

Very weak diversification

The 3 months correlation between SIVERS and CTS is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding SIVERS SEMICONDUCTORS AB and CTS Eventim AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTS Eventim AG 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 CTS Eventim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTS Eventim AG has no effect on the direction of SIVERS SEMICONDUCTORS i.e., SIVERS SEMICONDUCTORS and CTS Eventim go up and down completely randomly.

Pair Corralation between SIVERS SEMICONDUCTORS and CTS Eventim

Assuming the 90 days horizon SIVERS SEMICONDUCTORS AB is expected to under-perform the CTS Eventim. In addition to that, SIVERS SEMICONDUCTORS is 2.86 times more volatile than CTS Eventim AG. It trades about 0.0 of its total potential returns per unit of risk. CTS Eventim AG is currently generating about 0.04 per unit of volatility. If you would invest  6,074  in CTS Eventim AG on October 8, 2024 and sell it today you would earn a total of  2,376  from holding CTS Eventim AG or generate 39.12% 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.  CTS Eventim AG

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 latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

CTS Eventim AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CTS Eventim AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with SIVERS SEMICONDUCTORS and CTS Eventim

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

The idea behind SIVERS SEMICONDUCTORS AB and CTS Eventim AG 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.