Correlation Between SIVERS SEMICONDUCTORS and Axfood AB
Can any of the company-specific risk be diversified away by investing in both SIVERS SEMICONDUCTORS and Axfood AB 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 SEMICONDUCTORS and Axfood AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SIVERS SEMICONDUCTORS AB and Axfood AB, you can compare the effects of market volatilities on SIVERS SEMICONDUCTORS and Axfood AB 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 SEMICONDUCTORS with a short position of Axfood AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIVERS SEMICONDUCTORS and Axfood AB.
Diversification Opportunities for SIVERS SEMICONDUCTORS and Axfood AB
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SIVERS and Axfood is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding SIVERS SEMICONDUCTORS AB and Axfood AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axfood AB and SIVERS SEMICONDUCTORS 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 SEMICONDUCTORS AB are associated (or correlated) with Axfood AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axfood AB has no effect on the direction of SIVERS SEMICONDUCTORS i.e., SIVERS SEMICONDUCTORS and Axfood AB go up and down completely randomly.
Pair Corralation between SIVERS SEMICONDUCTORS and Axfood AB
Assuming the 90 days horizon SIVERS SEMICONDUCTORS AB is expected to generate 6.47 times more return on investment than Axfood AB. However, SIVERS SEMICONDUCTORS is 6.47 times more volatile than Axfood AB. It trades about 0.25 of its potential returns per unit of risk. Axfood AB is currently generating about -0.06 per unit of risk. If you would invest 16.00 in SIVERS SEMICONDUCTORS AB on September 19, 2024 and sell it today you would earn a total of 9.00 from holding SIVERS SEMICONDUCTORS AB or generate 56.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SIVERS SEMICONDUCTORS AB vs. Axfood AB
Performance |
| Timeline |
| SIVERS SEMICONDUCTORS |
| Axfood AB |
SIVERS SEMICONDUCTORS and Axfood AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SIVERS SEMICONDUCTORS and Axfood AB
The main advantage of trading using opposite SIVERS SEMICONDUCTORS and Axfood AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIVERS SEMICONDUCTORS position performs unexpectedly, Axfood AB 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 Axfood AB will offset losses from the drop in Axfood AB's long position.| SIVERS SEMICONDUCTORS vs. Taiwan Semiconductor Manufacturing | SIVERS SEMICONDUCTORS vs. Broadcom | SIVERS SEMICONDUCTORS vs. Superior Plus Corp | SIVERS SEMICONDUCTORS vs. Norsk Hydro ASA |
| Axfood AB vs. Metro AG | Axfood AB vs. Superior Plus Corp | Axfood AB vs. SIVERS SEMICONDUCTORS AB | Axfood AB vs. NorAm Drilling AS |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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