Correlation Between Globalfoundries and SVELEV

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

By analyzing existing cross correlation between Globalfoundries and SVELEV 18 10 FEB 31, you can compare the effects of market volatilities on Globalfoundries and SVELEV 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 Globalfoundries with a short position of SVELEV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globalfoundries and SVELEV.

Diversification Opportunities for Globalfoundries and SVELEV

-0.56

Correlation Coefficient

Globalfoundries  SVELEV

Excellent diversification

The 3 months correlation between Globalfoundries and SVELEV is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Globalfoundries and SVELEV 18 10 FEB 31 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SVELEV 18 10 and Globalfoundries 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 Globalfoundries are associated (or correlated) with SVELEV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SVELEV 18 10 has no effect on the direction of Globalfoundries i.e., Globalfoundries and SVELEV go up and down completely randomly.

Pair Corralation between Globalfoundries and SVELEV

Considering the 90-day investment horizon Globalfoundries is expected to generate 10.23 times more return on investment than SVELEV. However, Globalfoundries is 10.23 times more volatile than SVELEV 18 10 FEB 31. It trades about 0.06 of its potential returns per unit of risk. SVELEV 18 10 FEB 31 is currently generating about -0.14 per unit of risk. If you would invest  3,989  in Globalfoundries on September 12, 2024 and sell it today you would earn a total of  431.00  from holding Globalfoundries or generate 10.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	82.81%
Values	Daily Returns

Globalfoundries  vs.  SVELEV 18 10 FEB 31

Globalfoundries

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Globalfoundries are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, Globalfoundries unveiled solid returns over the last few months and may actually be approaching a breakup point.

SVELEV 18 10

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SVELEV 18 10 FEB 31 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, SVELEV is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Globalfoundries and SVELEV

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

The idea behind Globalfoundries and SVELEV 18 10 FEB 31 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.