Correlation Between SIVERS SEMICONDUCTORS and Hon Hai
Can any of the company-specific risk be diversified away by investing in both SIVERS SEMICONDUCTORS and Hon Hai 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 Hon Hai 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 Hon Hai Precision, you can compare the effects of market volatilities on SIVERS SEMICONDUCTORS and Hon Hai 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 Hon Hai. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIVERS SEMICONDUCTORS and Hon Hai.
Diversification Opportunities for SIVERS SEMICONDUCTORS and Hon Hai
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SIVERS and Hon is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding SIVERS SEMICONDUCTORS AB and Hon Hai Precision in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hon Hai Precision 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 Hon Hai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hon Hai Precision has no effect on the direction of SIVERS SEMICONDUCTORS i.e., SIVERS SEMICONDUCTORS and Hon Hai go up and down completely randomly.
Pair Corralation between SIVERS SEMICONDUCTORS and Hon Hai
Assuming the 90 days horizon SIVERS SEMICONDUCTORS AB is expected to under-perform the Hon Hai. In addition to that, SIVERS SEMICONDUCTORS is 1.89 times more volatile than Hon Hai Precision. It trades about -0.04 of its total potential returns per unit of risk. Hon Hai Precision is currently generating about 0.01 per unit of volatility. If you would invest 1,100 in Hon Hai Precision on September 21, 2024 and sell it today you would lose (50.00) from holding Hon Hai Precision or give up 4.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.08% |
| Values | Daily Returns |
SIVERS SEMICONDUCTORS AB vs. Hon Hai Precision
Performance |
| Timeline |
| SIVERS SEMICONDUCTORS |
| Hon Hai Precision |
SIVERS SEMICONDUCTORS and Hon Hai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SIVERS SEMICONDUCTORS and Hon Hai
The main advantage of trading using opposite SIVERS SEMICONDUCTORS and Hon Hai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIVERS SEMICONDUCTORS position performs unexpectedly, Hon Hai 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 Hon Hai will offset losses from the drop in Hon Hai'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 |
| Hon Hai vs. Sunny Optical Technology | Hon Hai vs. Superior Plus Corp | Hon Hai vs. SIVERS SEMICONDUCTORS AB | Hon Hai vs. Norsk Hydro ASA |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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