Correlation Between SIVERS SEMICONDUCTORS and IMPERIAL TOBACCO
Can any of the company-specific risk be diversified away by investing in both SIVERS SEMICONDUCTORS and IMPERIAL TOBACCO 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 IMPERIAL TOBACCO 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 IMPERIAL TOBACCO , you can compare the effects of market volatilities on SIVERS SEMICONDUCTORS and IMPERIAL TOBACCO 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 IMPERIAL TOBACCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIVERS SEMICONDUCTORS and IMPERIAL TOBACCO.
Diversification Opportunities for SIVERS SEMICONDUCTORS and IMPERIAL TOBACCO
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SIVERS and IMPERIAL is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding SIVERS SEMICONDUCTORS AB and IMPERIAL TOBACCO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IMPERIAL TOBACCO 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 IMPERIAL TOBACCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IMPERIAL TOBACCO has no effect on the direction of SIVERS SEMICONDUCTORS i.e., SIVERS SEMICONDUCTORS and IMPERIAL TOBACCO go up and down completely randomly.
Pair Corralation between SIVERS SEMICONDUCTORS and IMPERIAL TOBACCO
Assuming the 90 days horizon SIVERS SEMICONDUCTORS AB is expected to under-perform the IMPERIAL TOBACCO. In addition to that, SIVERS SEMICONDUCTORS is 4.38 times more volatile than IMPERIAL TOBACCO . It trades about -0.04 of its total potential returns per unit of risk. IMPERIAL TOBACCO is currently generating about 0.08 per unit of volatility. If you would invest 2,047 in IMPERIAL TOBACCO on August 27, 2024 and sell it today you would earn a total of 977.00 from holding IMPERIAL TOBACCO or generate 47.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SIVERS SEMICONDUCTORS AB vs. IMPERIAL TOBACCO
Performance |
| Timeline |
| SIVERS SEMICONDUCTORS |
| IMPERIAL TOBACCO |
SIVERS SEMICONDUCTORS and IMPERIAL TOBACCO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SIVERS SEMICONDUCTORS and IMPERIAL TOBACCO
The main advantage of trading using opposite SIVERS SEMICONDUCTORS and IMPERIAL TOBACCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIVERS SEMICONDUCTORS position performs unexpectedly, IMPERIAL TOBACCO 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 IMPERIAL TOBACCO will offset losses from the drop in IMPERIAL TOBACCO's long position.| SIVERS SEMICONDUCTORS vs. Canadian Utilities Limited | SIVERS SEMICONDUCTORS vs. Insteel Industries | SIVERS SEMICONDUCTORS vs. GFL ENVIRONM | SIVERS SEMICONDUCTORS vs. WILLIS LEASE FIN |
| IMPERIAL TOBACCO vs. Pure Storage | IMPERIAL TOBACCO vs. Stewart Information Services | IMPERIAL TOBACCO vs. CVS Health | IMPERIAL TOBACCO vs. National Health Investors |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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