Correlation Between SGH Old and CEVA

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

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

Diversification Opportunities for SGH Old and CEVA

0.0

Correlation Coefficient

SGH Old  CEVA

Pay attention - limited upside

The 3 months correlation between SGH and CEVA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SGH Old and CEVA Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEVA Inc and SGH Old 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 SGH Old are associated (or correlated) with CEVA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEVA Inc has no effect on the direction of SGH Old i.e., SGH Old and CEVA go up and down completely randomly.

Pair Corralation between SGH Old and CEVA

If you would invest  3,156  in CEVA Inc on November 19, 2024 and sell it today you would earn a total of  311.00  from holding CEVA Inc or generate 9.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

SGH Old  vs.  CEVA Inc

SGH Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days SGH Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, SGH Old is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

CEVA Inc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CEVA Inc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, CEVA sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SGH Old and CEVA

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

The idea behind SGH Old and CEVA Inc 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.