Correlation Between SEALSQ Corp and Globalfoundries

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

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

Diversification Opportunities for SEALSQ Corp and Globalfoundries

0.31

Correlation Coefficient

SEALSQ Corp  Globalfoundries

Weak diversification

The 3 months correlation between SEALSQ and Globalfoundries is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding SEALSQ Corp and Globalfoundries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globalfoundries and SEALSQ Corp 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 SEALSQ Corp are associated (or correlated) with Globalfoundries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globalfoundries has no effect on the direction of SEALSQ Corp i.e., SEALSQ Corp and Globalfoundries go up and down completely randomly.

Pair Corralation between SEALSQ Corp and Globalfoundries

Given the investment horizon of 90 days SEALSQ Corp is expected to generate 4.9 times more return on investment than Globalfoundries. However, SEALSQ Corp is 4.9 times more volatile than Globalfoundries. It trades about 0.01 of its potential returns per unit of risk. Globalfoundries is currently generating about -0.01 per unit of risk. If you would invest  1,540  in SEALSQ Corp on September 20, 2024 and sell it today you would lose (1,306) from holding SEALSQ Corp or give up 84.81% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	80.24%
Values	Daily Returns

SEALSQ Corp  vs.  Globalfoundries

SEALSQ Corp

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SEALSQ Corp are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, SEALSQ Corp unveiled solid returns over the last few months and may actually be approaching a breakup point.

Globalfoundries

Risk-Adjusted Performance

2 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Globalfoundries are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, Globalfoundries may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with SEALSQ Corp and Globalfoundries

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

The idea behind SEALSQ Corp and Globalfoundries 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 Global Correlations module to find global opportunities by holding instruments from different markets.