Correlation Between SIVERS SEMICONDUCTORS and GrafTech International

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

Diversification Opportunities for SIVERS SEMICONDUCTORS and GrafTech International

-0.7

Correlation Coefficient

SIVERS SEMICONDUCTORS  GrafTech International

Excellent diversification

The 3 months correlation between SIVERS and GrafTech is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding SIVERS SEMICONDUCTORS AB and GrafTech International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GrafTech International 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 GrafTech International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GrafTech International has no effect on the direction of SIVERS SEMICONDUCTORS i.e., SIVERS SEMICONDUCTORS and GrafTech International go up and down completely randomly.

Pair Corralation between SIVERS SEMICONDUCTORS and GrafTech International

Assuming the 90 days horizon SIVERS SEMICONDUCTORS is expected to generate 32.12 times less return on investment than GrafTech International. In addition to that, SIVERS SEMICONDUCTORS is 1.53 times more volatile than GrafTech International. It trades about 0.0 of its total potential returns per unit of risk. GrafTech International is currently generating about 0.03 per unit of volatility. If you would invest  160.00  in GrafTech International on October 25, 2024 and sell it today you would earn a total of  1.00  from holding GrafTech International or generate 0.63% return on investment over 90 days.

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

SIVERS SEMICONDUCTORS AB  vs.  GrafTech International

SIVERS SEMICONDUCTORS

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SIVERS SEMICONDUCTORS AB are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, SIVERS SEMICONDUCTORS may actually be approaching a critical reversion point that can send shares even higher in February 2025.

GrafTech International

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days GrafTech International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, GrafTech International is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with SIVERS SEMICONDUCTORS and GrafTech International

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

The idea behind SIVERS SEMICONDUCTORS AB and GrafTech International 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.