Correlation Between SIVERS SEMICONDUCTORS and CarMax

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

Diversification Opportunities for SIVERS SEMICONDUCTORS and CarMax

-0.76

Correlation Coefficient

SIVERS SEMICONDUCTORS  CarMax

Pay attention - limited upside

The 3 months correlation between SIVERS and CarMax is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding SIVERS SEMICONDUCTORS AB and CarMax Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CarMax Inc 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 CarMax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CarMax Inc has no effect on the direction of SIVERS SEMICONDUCTORS i.e., SIVERS SEMICONDUCTORS and CarMax go up and down completely randomly.

Pair Corralation between SIVERS SEMICONDUCTORS and CarMax

Assuming the 90 days horizon SIVERS SEMICONDUCTORS AB is expected to generate 4.59 times more return on investment than CarMax. However, SIVERS SEMICONDUCTORS is 4.59 times more volatile than CarMax Inc. It trades about 0.37 of its potential returns per unit of risk. CarMax Inc is currently generating about 0.24 per unit of risk. If you would invest  14.00  in SIVERS SEMICONDUCTORS AB on September 22, 2024 and sell it today you would earn a total of  14.00  from holding SIVERS SEMICONDUCTORS AB or generate 100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.65%
Values	Daily Returns

SIVERS SEMICONDUCTORS AB  vs.  CarMax Inc

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.

CarMax Inc

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CarMax Inc are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, CarMax reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SIVERS SEMICONDUCTORS and CarMax

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

The idea behind SIVERS SEMICONDUCTORS AB and CarMax Inc 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.