Correlation Between SIVERS SEMICONDUCTORS and LG Electronics
Can any of the company-specific risk be diversified away by investing in both SIVERS SEMICONDUCTORS and LG Electronics 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 LG Electronics 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 LG Electronics, you can compare the effects of market volatilities on SIVERS SEMICONDUCTORS and LG Electronics 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 LG Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIVERS SEMICONDUCTORS and LG Electronics.
Diversification Opportunities for SIVERS SEMICONDUCTORS and LG Electronics
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SIVERS and LGLG is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding SIVERS SEMICONDUCTORS AB and LG Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Electronics 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 LG Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Electronics has no effect on the direction of SIVERS SEMICONDUCTORS i.e., SIVERS SEMICONDUCTORS and LG Electronics go up and down completely randomly.
Pair Corralation between SIVERS SEMICONDUCTORS and LG Electronics
Assuming the 90 days horizon SIVERS SEMICONDUCTORS AB is expected to generate 2.93 times more return on investment than LG Electronics. However, SIVERS SEMICONDUCTORS is 2.93 times more volatile than LG Electronics. It trades about 0.27 of its potential returns per unit of risk. LG Electronics is currently generating about -0.01 per unit of risk. If you would invest 18.00 in SIVERS SEMICONDUCTORS AB on September 25, 2024 and sell it today you would earn a total of 10.00 from holding SIVERS SEMICONDUCTORS AB or generate 55.56% 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. LG Electronics
Performance |
| Timeline |
| SIVERS SEMICONDUCTORS |
| LG Electronics |
SIVERS SEMICONDUCTORS and LG Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SIVERS SEMICONDUCTORS and LG Electronics
The main advantage of trading using opposite SIVERS SEMICONDUCTORS and LG Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIVERS SEMICONDUCTORS position performs unexpectedly, LG Electronics 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 LG Electronics will offset losses from the drop in LG Electronics' long position.| SIVERS SEMICONDUCTORS vs. AEON STORES | SIVERS SEMICONDUCTORS vs. PICKN PAY STORES | SIVERS SEMICONDUCTORS vs. Fast Retailing Co | SIVERS SEMICONDUCTORS vs. Burlington Stores |
| LG Electronics vs. Apple Inc | LG Electronics vs. Apple Inc | LG Electronics vs. Samsung Electronics Co | LG Electronics vs. Samsung Electronics Co |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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