Correlation Between Sivers IMA and XMReality

Can any of the company-specific risk be diversified away by investing in both Sivers IMA and XMReality 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 XMReality 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 XMReality AB, you can compare the effects of market volatilities on Sivers IMA and XMReality 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 XMReality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sivers IMA and XMReality.

Diversification Opportunities for Sivers IMA and XMReality

-0.62

Correlation Coefficient

Sivers IMA  XMReality

Excellent diversification

The 3 months correlation between Sivers and XMReality is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Sivers IMA Holding and XMReality AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XMReality AB 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 XMReality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XMReality AB has no effect on the direction of Sivers IMA i.e., Sivers IMA and XMReality go up and down completely randomly.

Pair Corralation between Sivers IMA and XMReality

Assuming the 90 days trading horizon Sivers IMA Holding is expected to generate 1.86 times more return on investment than XMReality. However, Sivers IMA is 1.86 times more volatile than XMReality AB. It trades about 0.17 of its potential returns per unit of risk. XMReality AB is currently generating about 0.01 per unit of risk. If you would invest  314.00  in Sivers IMA Holding on December 2, 2024 and sell it today you would earn a total of  193.00  from holding Sivers IMA Holding or generate 61.46% return on investment over 90 days.

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

Sivers IMA Holding  vs.  XMReality AB

Sivers IMA Holding

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sivers IMA Holding are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Sivers IMA unveiled solid returns over the last few months and may actually be approaching a breakup point.

XMReality AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days XMReality AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Sivers IMA and XMReality

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

The idea behind Sivers IMA Holding and XMReality 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.

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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.