Correlation Between SIVERS SEMICONDUCTORS and Shanghai Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both SIVERS SEMICONDUCTORS and Shanghai Pharmaceuticals 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 Shanghai Pharmaceuticals 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 Shanghai Pharmaceuticals Holding, you can compare the effects of market volatilities on SIVERS SEMICONDUCTORS and Shanghai Pharmaceuticals 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 Shanghai Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIVERS SEMICONDUCTORS and Shanghai Pharmaceuticals.
Diversification Opportunities for SIVERS SEMICONDUCTORS and Shanghai Pharmaceuticals
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SIVERS and Shanghai is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding SIVERS SEMICONDUCTORS AB and Shanghai Pharmaceuticals Holdi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Pharmaceuticals 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 Shanghai Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Pharmaceuticals has no effect on the direction of SIVERS SEMICONDUCTORS i.e., SIVERS SEMICONDUCTORS and Shanghai Pharmaceuticals go up and down completely randomly.
Pair Corralation between SIVERS SEMICONDUCTORS and Shanghai Pharmaceuticals
Assuming the 90 days horizon SIVERS SEMICONDUCTORS AB is expected to under-perform the Shanghai Pharmaceuticals. In addition to that, SIVERS SEMICONDUCTORS is 2.17 times more volatile than Shanghai Pharmaceuticals Holding. It trades about -0.19 of its total potential returns per unit of risk. Shanghai Pharmaceuticals Holding is currently generating about 0.15 per unit of volatility. If you would invest 109.00 in Shanghai Pharmaceuticals Holding on August 28, 2024 and sell it today you would earn a total of 40.00 from holding Shanghai Pharmaceuticals Holding or generate 36.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SIVERS SEMICONDUCTORS AB vs. Shanghai Pharmaceuticals Holdi
Performance |
| Timeline |
| SIVERS SEMICONDUCTORS |
| Shanghai Pharmaceuticals |
SIVERS SEMICONDUCTORS and Shanghai Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SIVERS SEMICONDUCTORS and Shanghai Pharmaceuticals
The main advantage of trading using opposite SIVERS SEMICONDUCTORS and Shanghai Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIVERS SEMICONDUCTORS position performs unexpectedly, Shanghai Pharmaceuticals 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 Shanghai Pharmaceuticals will offset losses from the drop in Shanghai Pharmaceuticals' long position.| SIVERS SEMICONDUCTORS vs. Austevoll Seafood ASA | SIVERS SEMICONDUCTORS vs. AUSNUTRIA DAIRY | SIVERS SEMICONDUCTORS vs. SENECA FOODS A | SIVERS SEMICONDUCTORS vs. Cal Maine Foods |
| Shanghai Pharmaceuticals vs. Westinghouse Air Brake | Shanghai Pharmaceuticals vs. GEELY AUTOMOBILE | Shanghai Pharmaceuticals vs. Fair Isaac Corp | Shanghai Pharmaceuticals vs. Commercial Vehicle Group |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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