Correlation Between SIVERS SEMICONDUCTORS and Alibaba Health

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

Diversification Opportunities for SIVERS SEMICONDUCTORS and Alibaba Health

0.56

Correlation Coefficient

SIVERS SEMICONDUCTORS  Alibaba Health

Very weak diversification

The 3 months correlation between SIVERS and Alibaba is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding SIVERS SEMICONDUCTORS AB and Alibaba Health Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alibaba Health Infor 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 Alibaba Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alibaba Health Infor has no effect on the direction of SIVERS SEMICONDUCTORS i.e., SIVERS SEMICONDUCTORS and Alibaba Health go up and down completely randomly.

Pair Corralation between SIVERS SEMICONDUCTORS and Alibaba Health

Assuming the 90 days horizon SIVERS SEMICONDUCTORS AB is expected to generate 2.31 times more return on investment than Alibaba Health. However, SIVERS SEMICONDUCTORS is 2.31 times more volatile than Alibaba Health Information. It trades about -0.01 of its potential returns per unit of risk. Alibaba Health Information is currently generating about -0.12 per unit of risk. If you would invest  36.00  in SIVERS SEMICONDUCTORS AB on October 8, 2024 and sell it today you would lose (11.00) from holding SIVERS SEMICONDUCTORS AB or give up 30.56% of portfolio value over 90 days.

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

SIVERS SEMICONDUCTORS AB  vs.  Alibaba Health Information

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 latest unsteady 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.

Alibaba Health Infor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alibaba Health Information 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 February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with SIVERS SEMICONDUCTORS and Alibaba Health

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

The idea behind SIVERS SEMICONDUCTORS AB and Alibaba Health Information 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.