Correlation Between H2O Retailing and SIVERS SEMICONDUCTORS

Can any of the company-specific risk be diversified away by investing in both H2O Retailing and SIVERS SEMICONDUCTORS 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 H2O Retailing and SIVERS SEMICONDUCTORS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between H2O Retailing and SIVERS SEMICONDUCTORS AB, you can compare the effects of market volatilities on H2O Retailing and SIVERS SEMICONDUCTORS 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 H2O Retailing with a short position of SIVERS SEMICONDUCTORS. Check out your portfolio center. Please also check ongoing floating volatility patterns of H2O Retailing and SIVERS SEMICONDUCTORS.

Diversification Opportunities for H2O Retailing and SIVERS SEMICONDUCTORS

-0.08

Correlation Coefficient

H2O Retailing  SIVERS SEMICONDUCTORS

Good diversification

The 3 months correlation between H2O and SIVERS is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding H2O Retailing and SIVERS SEMICONDUCTORS AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIVERS SEMICONDUCTORS and H2O Retailing 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 H2O Retailing are associated (or correlated) with SIVERS SEMICONDUCTORS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIVERS SEMICONDUCTORS has no effect on the direction of H2O Retailing i.e., H2O Retailing and SIVERS SEMICONDUCTORS go up and down completely randomly.

Pair Corralation between H2O Retailing and SIVERS SEMICONDUCTORS

Assuming the 90 days horizon H2O Retailing is expected to generate 1.17 times less return on investment than SIVERS SEMICONDUCTORS. But when comparing it to its historical volatility, H2O Retailing is 6.36 times less risky than SIVERS SEMICONDUCTORS. It trades about 0.11 of its potential returns per unit of risk. SIVERS SEMICONDUCTORS AB is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  33.00  in SIVERS SEMICONDUCTORS AB on October 25, 2024 and sell it today you would lose (6.00) from holding SIVERS SEMICONDUCTORS AB or give up 18.18% of portfolio value over 90 days.

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

H2O Retailing  vs.  SIVERS SEMICONDUCTORS AB

H2O Retailing

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in H2O Retailing are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, H2O Retailing may actually be approaching a critical reversion point that can send shares even higher in February 2025.

SIVERS SEMICONDUCTORS

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SIVERS SEMICONDUCTORS AB are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, SIVERS SEMICONDUCTORS may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with H2O Retailing and SIVERS SEMICONDUCTORS

The main advantage of trading using opposite H2O Retailing and SIVERS SEMICONDUCTORS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if H2O Retailing position performs unexpectedly, SIVERS SEMICONDUCTORS 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 SEMICONDUCTORS will offset losses from the drop in SIVERS SEMICONDUCTORS's long position.

The idea behind H2O Retailing and SIVERS SEMICONDUCTORS AB 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.

Check out your portfolio center.

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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..