Correlation Between SIVERS SEMICONDUCTORS and Schweizer Electronic
Can any of the company-specific risk be diversified away by investing in both SIVERS SEMICONDUCTORS and Schweizer Electronic 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 Schweizer Electronic 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 Schweizer Electronic AG, you can compare the effects of market volatilities on SIVERS SEMICONDUCTORS and Schweizer Electronic 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 Schweizer Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIVERS SEMICONDUCTORS and Schweizer Electronic.
Diversification Opportunities for SIVERS SEMICONDUCTORS and Schweizer Electronic
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SIVERS and Schweizer is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding SIVERS SEMICONDUCTORS AB and Schweizer Electronic AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schweizer Electronic 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 Schweizer Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schweizer Electronic has no effect on the direction of SIVERS SEMICONDUCTORS i.e., SIVERS SEMICONDUCTORS and Schweizer Electronic go up and down completely randomly.
Pair Corralation between SIVERS SEMICONDUCTORS and Schweizer Electronic
Assuming the 90 days horizon SIVERS SEMICONDUCTORS is expected to generate 2.65 times less return on investment than Schweizer Electronic. But when comparing it to its historical volatility, SIVERS SEMICONDUCTORS AB is 3.22 times less risky than Schweizer Electronic. It trades about 0.1 of its potential returns per unit of risk. Schweizer Electronic AG is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 246.00 in Schweizer Electronic AG on December 29, 2024 and sell it today you would earn a total of 94.00 from holding Schweizer Electronic AG or generate 38.21% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
SIVERS SEMICONDUCTORS AB vs. Schweizer Electronic AG
Performance |
Timeline |
SIVERS SEMICONDUCTORS |
Schweizer Electronic |
SIVERS SEMICONDUCTORS and Schweizer Electronic Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SIVERS SEMICONDUCTORS and Schweizer Electronic
The main advantage of trading using opposite SIVERS SEMICONDUCTORS and Schweizer Electronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIVERS SEMICONDUCTORS position performs unexpectedly, Schweizer Electronic 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 Schweizer Electronic will offset losses from the drop in Schweizer Electronic's long position.SIVERS SEMICONDUCTORS vs. Penta Ocean Construction Co | SIVERS SEMICONDUCTORS vs. OPERA SOFTWARE | SIVERS SEMICONDUCTORS vs. MAGIC SOFTWARE ENTR | SIVERS SEMICONDUCTORS vs. North American Construction |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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