Correlation Between SIVERS SEMICONDUCTORS and ENGIE ADR/1

Can any of the company-specific risk be diversified away by investing in both SIVERS SEMICONDUCTORS and ENGIE ADR/1 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 ENGIE ADR/1 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 ENGIE ADR1 EO, you can compare the effects of market volatilities on SIVERS SEMICONDUCTORS and ENGIE ADR/1 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 ENGIE ADR/1. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIVERS SEMICONDUCTORS and ENGIE ADR/1.

Diversification Opportunities for SIVERS SEMICONDUCTORS and ENGIE ADR/1

0.82

Correlation Coefficient

SIVERS SEMICONDUCTORS  ENGIE ADR/1

Very poor diversification

The 3 months correlation between SIVERS and ENGIE is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding SIVERS SEMICONDUCTORS AB and ENGIE ADR1 EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENGIE ADR1 EO 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 ENGIE ADR/1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENGIE ADR1 EO has no effect on the direction of SIVERS SEMICONDUCTORS i.e., SIVERS SEMICONDUCTORS and ENGIE ADR/1 go up and down completely randomly.

Pair Corralation between SIVERS SEMICONDUCTORS and ENGIE ADR/1

Assuming the 90 days horizon SIVERS SEMICONDUCTORS AB is expected to generate 6.58 times more return on investment than ENGIE ADR/1. However, SIVERS SEMICONDUCTORS is 6.58 times more volatile than ENGIE ADR1 EO. It trades about 0.13 of its potential returns per unit of risk. ENGIE ADR1 EO is currently generating about 0.21 per unit of risk. If you would invest  25.00  in SIVERS SEMICONDUCTORS AB on December 21, 2024 and sell it today you would earn a total of  13.00  from holding SIVERS SEMICONDUCTORS AB or generate 52.0% return on investment over 90 days.

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

SIVERS SEMICONDUCTORS AB  vs.  ENGIE ADR1 EO

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 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, SIVERS SEMICONDUCTORS reported solid returns over the last few months and may actually be approaching a breakup point.

ENGIE ADR1 EO

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ENGIE ADR1 EO are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, ENGIE ADR/1 reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SIVERS SEMICONDUCTORS and ENGIE ADR/1

The main advantage of trading using opposite SIVERS SEMICONDUCTORS and ENGIE ADR/1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIVERS SEMICONDUCTORS position performs unexpectedly, ENGIE ADR/1 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 ENGIE ADR/1 will offset losses from the drop in ENGIE ADR/1's long position.

The idea behind SIVERS SEMICONDUCTORS AB and ENGIE ADR1 EO 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.