Correlation Between SIVERS SEMICONDUCTORS and AerCap Holdings

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

Diversification Opportunities for SIVERS SEMICONDUCTORS and AerCap Holdings

0.48

Correlation Coefficient

SIVERS SEMICONDUCTORS  AerCap Holdings

Very weak diversification

The 3 months correlation between SIVERS and AerCap is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding SIVERS SEMICONDUCTORS AB and AerCap Holdings NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AerCap Holdings NV 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 AerCap Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AerCap Holdings NV has no effect on the direction of SIVERS SEMICONDUCTORS i.e., SIVERS SEMICONDUCTORS and AerCap Holdings go up and down completely randomly.

Pair Corralation between SIVERS SEMICONDUCTORS and AerCap Holdings

Assuming the 90 days horizon SIVERS SEMICONDUCTORS is expected to generate 1.09 times less return on investment than AerCap Holdings. In addition to that, SIVERS SEMICONDUCTORS is 4.29 times more volatile than AerCap Holdings NV. It trades about 0.02 of its total potential returns per unit of risk. AerCap Holdings NV is currently generating about 0.11 per unit of volatility. If you would invest  5,650  in AerCap Holdings NV on December 2, 2024 and sell it today you would earn a total of  4,248  from holding AerCap Holdings NV or generate 75.19% return on investment over 90 days.

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

SIVERS SEMICONDUCTORS AB  vs.  AerCap Holdings NV

SIVERS SEMICONDUCTORS

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SIVERS SEMICONDUCTORS AB are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, SIVERS SEMICONDUCTORS reported solid returns over the last few months and may actually be approaching a breakup point.

AerCap Holdings NV

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AerCap Holdings NV are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, AerCap Holdings is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with SIVERS SEMICONDUCTORS and AerCap Holdings

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

The idea behind SIVERS SEMICONDUCTORS AB and AerCap Holdings NV 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.