Correlation Between SIVERS SEMICONDUCTORS and Hana Microelectronics
Can any of the company-specific risk be diversified away by investing in both SIVERS SEMICONDUCTORS and Hana Microelectronics 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 Hana Microelectronics 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 Hana Microelectronics Public, you can compare the effects of market volatilities on SIVERS SEMICONDUCTORS and Hana Microelectronics 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 Hana Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIVERS SEMICONDUCTORS and Hana Microelectronics.
Diversification Opportunities for SIVERS SEMICONDUCTORS and Hana Microelectronics
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SIVERS and Hana is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding SIVERS SEMICONDUCTORS AB and Hana Microelectronics Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hana Microelectronics 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 Hana Microelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hana Microelectronics has no effect on the direction of SIVERS SEMICONDUCTORS i.e., SIVERS SEMICONDUCTORS and Hana Microelectronics go up and down completely randomly.
Pair Corralation between SIVERS SEMICONDUCTORS and Hana Microelectronics
Assuming the 90 days horizon SIVERS SEMICONDUCTORS is expected to generate 12.33 times less return on investment than Hana Microelectronics. But when comparing it to its historical volatility, SIVERS SEMICONDUCTORS AB is 1.23 times less risky than Hana Microelectronics. It trades about 0.01 of its potential returns per unit of risk. Hana Microelectronics Public is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 62.00 in Hana Microelectronics Public on September 13, 2024 and sell it today you would earn a total of 9.00 from holding Hana Microelectronics Public or generate 14.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SIVERS SEMICONDUCTORS AB vs. Hana Microelectronics Public
Performance |
| Timeline |
| SIVERS SEMICONDUCTORS |
| Hana Microelectronics |
SIVERS SEMICONDUCTORS and Hana Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SIVERS SEMICONDUCTORS and Hana Microelectronics
The main advantage of trading using opposite SIVERS SEMICONDUCTORS and Hana Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIVERS SEMICONDUCTORS position performs unexpectedly, Hana Microelectronics 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 Hana Microelectronics will offset losses from the drop in Hana Microelectronics' long position.| SIVERS SEMICONDUCTORS vs. REGAL ASIAN INVESTMENTS | SIVERS SEMICONDUCTORS vs. Monster Beverage Corp | SIVERS SEMICONDUCTORS vs. SLR Investment Corp | SIVERS SEMICONDUCTORS vs. PennyMac Mortgage Investment |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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