Correlation Between Gapwaves and Sivers IMA

Can any of the company-specific risk be diversified away by investing in both Gapwaves and Sivers IMA 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 Gapwaves and Sivers IMA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Gapwaves AB Series and Sivers IMA Holding, you can compare the effects of market volatilities on Gapwaves and Sivers IMA 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 Gapwaves with a short position of Sivers IMA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gapwaves and Sivers IMA.

Diversification Opportunities for Gapwaves and Sivers IMA

0.3

Correlation Coefficient

Gapwaves  Sivers IMA

Weak diversification

The 3 months correlation between Gapwaves and Sivers is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Gapwaves AB Series and Sivers IMA Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sivers IMA Holding and Gapwaves 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 Gapwaves AB Series are associated (or correlated) with Sivers IMA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sivers IMA Holding has no effect on the direction of Gapwaves i.e., Gapwaves and Sivers IMA go up and down completely randomly.

Pair Corralation between Gapwaves and Sivers IMA

Assuming the 90 days trading horizon Gapwaves AB Series is expected to under-perform the Sivers IMA. But the stock apears to be less risky and, when comparing its historical volatility, Gapwaves AB Series is 2.06 times less risky than Sivers IMA. The stock trades about -0.12 of its potential returns per unit of risk. The Sivers IMA Holding is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  396.00  in Sivers IMA Holding on September 27, 2024 and sell it today you would lose (48.00) from holding Sivers IMA Holding or give up 12.12% of portfolio value over 90 days.

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

Gapwaves AB Series  vs.  Sivers IMA Holding

Gapwaves AB Series

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gapwaves AB Series has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Sivers IMA Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sivers IMA Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Sivers IMA is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Gapwaves and Sivers IMA

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

The idea behind Gapwaves AB Series and Sivers IMA Holding 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.