Correlation Between Sivers IMA and Gapwaves

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

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

Diversification Opportunities for Sivers IMA and Gapwaves

0.3

Correlation Coefficient

Sivers IMA  Gapwaves

Weak diversification

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

Pair Corralation between Sivers IMA and Gapwaves

Assuming the 90 days trading horizon Sivers IMA Holding is expected to generate 1.97 times more return on investment than Gapwaves. However, Sivers IMA is 1.97 times more volatile than Gapwaves AB Series. It trades about 0.02 of its potential returns per unit of risk. Gapwaves AB Series is currently generating about -0.03 per unit of risk. If you would invest  403.00  in Sivers IMA Holding on September 27, 2024 and sell it today you would lose (55.00) from holding Sivers IMA Holding or give up 13.65% of portfolio value over 90 days.

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

Sivers IMA Holding  vs.  Gapwaves AB Series

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.

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 uncertain 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.

Pair Trading with Sivers IMA and Gapwaves

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

The idea behind Sivers IMA Holding and Gapwaves AB Series 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.