Correlation Between SIVERS SEMICONDUCTORS and YASKAWA ELEC

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

Diversification Opportunities for SIVERS SEMICONDUCTORS and YASKAWA ELEC

-0.28

Correlation Coefficient

SIVERS SEMICONDUCTORS  YASKAWA ELEC

Very good diversification

The 3 months correlation between SIVERS and YASKAWA is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding SIVERS SEMICONDUCTORS AB and YASKAWA ELEC UNSP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YASKAWA ELEC UNSP 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 YASKAWA ELEC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YASKAWA ELEC UNSP has no effect on the direction of SIVERS SEMICONDUCTORS i.e., SIVERS SEMICONDUCTORS and YASKAWA ELEC go up and down completely randomly.

Pair Corralation between SIVERS SEMICONDUCTORS and YASKAWA ELEC

Assuming the 90 days horizon SIVERS SEMICONDUCTORS AB is expected to generate 2.65 times more return on investment than YASKAWA ELEC. However, SIVERS SEMICONDUCTORS is 2.65 times more volatile than YASKAWA ELEC UNSP. It trades about 0.1 of its potential returns per unit of risk. YASKAWA ELEC UNSP is currently generating about 0.02 per unit of risk. If you would invest  26.00  in SIVERS SEMICONDUCTORS AB on December 29, 2024 and sell it today you would earn a total of  9.00  from holding SIVERS SEMICONDUCTORS AB or generate 34.62% return on investment over 90 days.

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

SIVERS SEMICONDUCTORS AB  vs.  YASKAWA ELEC UNSP

SIVERS SEMICONDUCTORS

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SIVERS SEMICONDUCTORS AB are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, SIVERS SEMICONDUCTORS reported solid returns over the last few months and may actually be approaching a breakup point.

YASKAWA ELEC UNSP

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in YASKAWA ELEC UNSP are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental indicators, YASKAWA ELEC 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 YASKAWA ELEC

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

The idea behind SIVERS SEMICONDUCTORS AB and YASKAWA ELEC UNSP 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.