Correlation Between SIVERS SEMICONDUCTORS and Nucor

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

Diversification Opportunities for SIVERS SEMICONDUCTORS and Nucor

-0.13

Correlation Coefficient

SIVERS SEMICONDUCTORS  Nucor

Good diversification

The 3 months correlation between SIVERS and Nucor is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding SIVERS SEMICONDUCTORS AB and Nucor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nucor 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 Nucor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nucor has no effect on the direction of SIVERS SEMICONDUCTORS i.e., SIVERS SEMICONDUCTORS and Nucor go up and down completely randomly.

Pair Corralation between SIVERS SEMICONDUCTORS and Nucor

Assuming the 90 days horizon SIVERS SEMICONDUCTORS AB is expected to generate 3.83 times more return on investment than Nucor. However, SIVERS SEMICONDUCTORS is 3.83 times more volatile than Nucor. It trades about 0.22 of its potential returns per unit of risk. Nucor is currently generating about -0.6 per unit of risk. If you would invest  21.00  in SIVERS SEMICONDUCTORS AB on October 1, 2024 and sell it today you would earn a total of  7.00  from holding SIVERS SEMICONDUCTORS AB or generate 33.33% return on investment over 90 days.

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

SIVERS SEMICONDUCTORS AB  vs.  Nucor

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.

Nucor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nucor has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with SIVERS SEMICONDUCTORS and Nucor

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

The idea behind SIVERS SEMICONDUCTORS AB and Nucor 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.

Check out your portfolio center.

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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.