Correlation Between SIVERS SEMICONDUCTORS and Polyplex Public

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

Diversification Opportunities for SIVERS SEMICONDUCTORS and Polyplex Public

-0.57

Correlation Coefficient

SIVERS SEMICONDUCTORS  Polyplex Public

Excellent diversification

The 3 months correlation between SIVERS and Polyplex is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding SIVERS SEMICONDUCTORS AB and Polyplex Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polyplex Public 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 Polyplex Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polyplex Public has no effect on the direction of SIVERS SEMICONDUCTORS i.e., SIVERS SEMICONDUCTORS and Polyplex Public go up and down completely randomly.

Pair Corralation between SIVERS SEMICONDUCTORS and Polyplex Public

Assuming the 90 days horizon SIVERS SEMICONDUCTORS is expected to generate 12.76 times less return on investment than Polyplex Public. But when comparing it to its historical volatility, SIVERS SEMICONDUCTORS AB is 1.83 times less risky than Polyplex Public. It trades about 0.02 of its potential returns per unit of risk. Polyplex Public is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  14.00  in Polyplex Public on October 9, 2024 and sell it today you would earn a total of  15.00  from holding Polyplex Public or generate 107.14% return on investment over 90 days.

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

SIVERS SEMICONDUCTORS AB  vs.  Polyplex Public

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.

Polyplex Public

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Polyplex Public are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Polyplex Public reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SIVERS SEMICONDUCTORS and Polyplex Public

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

The idea behind SIVERS SEMICONDUCTORS AB and Polyplex Public 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.