Correlation Between SIVERS SEMICONDUCTORS and Mueller Industries

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

Diversification Opportunities for SIVERS SEMICONDUCTORS and Mueller Industries

-0.58

Correlation Coefficient

SIVERS SEMICONDUCTORS  Mueller Industries

Excellent diversification

The 3 months correlation between SIVERS and Mueller is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding SIVERS SEMICONDUCTORS AB and Mueller Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mueller Industries 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 Mueller Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mueller Industries has no effect on the direction of SIVERS SEMICONDUCTORS i.e., SIVERS SEMICONDUCTORS and Mueller Industries go up and down completely randomly.

Pair Corralation between SIVERS SEMICONDUCTORS and Mueller Industries

Assuming the 90 days horizon SIVERS SEMICONDUCTORS AB is expected to under-perform the Mueller Industries. In addition to that, SIVERS SEMICONDUCTORS is 2.14 times more volatile than Mueller Industries. It trades about 0.0 of its total potential returns per unit of risk. Mueller Industries is currently generating about 0.09 per unit of volatility. If you would invest  2,811  in Mueller Industries on October 11, 2024 and sell it today you would earn a total of  4,789  from holding Mueller Industries or generate 170.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

SIVERS SEMICONDUCTORS AB  vs.  Mueller Industries

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 newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Mueller Industries

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mueller Industries are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Mueller Industries reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SIVERS SEMICONDUCTORS and Mueller Industries

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

The idea behind SIVERS SEMICONDUCTORS AB and Mueller Industries 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.