Correlation Between SIVERS SEMICONDUCTORS and WuXi AppTec

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

Diversification Opportunities for SIVERS SEMICONDUCTORS and WuXi AppTec

0.31

Correlation Coefficient

SIVERS SEMICONDUCTORS  WuXi AppTec

Weak diversification

The 3 months correlation between SIVERS and WuXi is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding SIVERS SEMICONDUCTORS AB and WuXi AppTec Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WuXi AppTec 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 WuXi AppTec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WuXi AppTec has no effect on the direction of SIVERS SEMICONDUCTORS i.e., SIVERS SEMICONDUCTORS and WuXi AppTec go up and down completely randomly.

Pair Corralation between SIVERS SEMICONDUCTORS and WuXi AppTec

Assuming the 90 days horizon SIVERS SEMICONDUCTORS AB is expected to under-perform the WuXi AppTec. In addition to that, SIVERS SEMICONDUCTORS is 1.06 times more volatile than WuXi AppTec Co. It trades about 0.0 of its total potential returns per unit of risk. WuXi AppTec Co is currently generating about 0.02 per unit of volatility. If you would invest  742.00  in WuXi AppTec Co on October 5, 2024 and sell it today you would lose (57.00) from holding WuXi AppTec Co or give up 7.68% of portfolio value over 90 days.

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

SIVERS SEMICONDUCTORS AB  vs.  WuXi AppTec Co

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.

WuXi AppTec

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WuXi AppTec Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain 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 WuXi AppTec

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

The idea behind SIVERS SEMICONDUCTORS AB and WuXi AppTec Co 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.