Correlation Between SIVERS SEMICONDUCTORS and AJ LUCAS

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

Diversification Opportunities for SIVERS SEMICONDUCTORS and AJ LUCAS

0.37

Correlation Coefficient

SIVERS SEMICONDUCTORS  AJ LUCAS

Weak diversification

The 3 months correlation between SIVERS and FW9 is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding SIVERS SEMICONDUCTORS AB and AJ LUCAS GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AJ LUCAS GROUP 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 AJ LUCAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AJ LUCAS GROUP has no effect on the direction of SIVERS SEMICONDUCTORS i.e., SIVERS SEMICONDUCTORS and AJ LUCAS go up and down completely randomly.

Pair Corralation between SIVERS SEMICONDUCTORS and AJ LUCAS

Assuming the 90 days horizon SIVERS SEMICONDUCTORS AB is expected to generate 0.77 times more return on investment than AJ LUCAS. However, SIVERS SEMICONDUCTORS AB is 1.3 times less risky than AJ LUCAS. It trades about 0.24 of its potential returns per unit of risk. AJ LUCAS GROUP is currently generating about -0.24 per unit of risk. If you would invest  19.00  in SIVERS SEMICONDUCTORS AB on October 5, 2024 and sell it today you would earn a total of  7.00  from holding SIVERS SEMICONDUCTORS AB or generate 36.84% return on investment over 90 days.

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

SIVERS SEMICONDUCTORS AB  vs.  AJ LUCAS GROUP

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.

AJ LUCAS GROUP

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days AJ LUCAS GROUP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly unsteady basic indicators, AJ LUCAS reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SIVERS SEMICONDUCTORS and AJ LUCAS

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

The idea behind SIVERS SEMICONDUCTORS AB and AJ LUCAS GROUP 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.