Correlation Between SIVERS SEMICONDUCTORS and NISSAN CHEMICAL

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

Diversification Opportunities for SIVERS SEMICONDUCTORS and NISSAN CHEMICAL

-0.76

Correlation Coefficient

SIVERS SEMICONDUCTORS  NISSAN CHEMICAL

Pay attention - limited upside

The 3 months correlation between SIVERS and NISSAN is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding SIVERS SEMICONDUCTORS AB and NISSAN CHEMICAL IND in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NISSAN CHEMICAL IND 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 NISSAN CHEMICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NISSAN CHEMICAL IND has no effect on the direction of SIVERS SEMICONDUCTORS i.e., SIVERS SEMICONDUCTORS and NISSAN CHEMICAL go up and down completely randomly.

Pair Corralation between SIVERS SEMICONDUCTORS and NISSAN CHEMICAL

Assuming the 90 days horizon SIVERS SEMICONDUCTORS AB is expected to under-perform the NISSAN CHEMICAL. In addition to that, SIVERS SEMICONDUCTORS is 6.8 times more volatile than NISSAN CHEMICAL IND. It trades about -0.15 of its total potential returns per unit of risk. NISSAN CHEMICAL IND is currently generating about 0.09 per unit of volatility. If you would invest  3,040  in NISSAN CHEMICAL IND on August 31, 2024 and sell it today you would earn a total of  180.00  from holding NISSAN CHEMICAL IND or generate 5.92% 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.  NISSAN CHEMICAL IND

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 fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

NISSAN CHEMICAL IND

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in NISSAN CHEMICAL IND are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental indicators, NISSAN CHEMICAL is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with SIVERS SEMICONDUCTORS and NISSAN CHEMICAL

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

The idea behind SIVERS SEMICONDUCTORS AB and NISSAN CHEMICAL IND 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.