Correlation Between SIVERS SEMICONDUCTORS and KOWORLD AG
Can any of the company-specific risk be diversified away by investing in both SIVERS SEMICONDUCTORS and KOWORLD AG 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 KOWORLD AG 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 KOWORLD AG, you can compare the effects of market volatilities on SIVERS SEMICONDUCTORS and KOWORLD AG 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 KOWORLD AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIVERS SEMICONDUCTORS and KOWORLD AG.
Diversification Opportunities for SIVERS SEMICONDUCTORS and KOWORLD AG
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SIVERS and KOWORLD is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding SIVERS SEMICONDUCTORS AB and KOWORLD AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KOWORLD AG 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 KOWORLD AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KOWORLD AG has no effect on the direction of SIVERS SEMICONDUCTORS i.e., SIVERS SEMICONDUCTORS and KOWORLD AG go up and down completely randomly.
Pair Corralation between SIVERS SEMICONDUCTORS and KOWORLD AG
Assuming the 90 days horizon SIVERS SEMICONDUCTORS AB is expected to under-perform the KOWORLD AG. In addition to that, SIVERS SEMICONDUCTORS is 2.15 times more volatile than KOWORLD AG. It trades about -0.03 of its total potential returns per unit of risk. KOWORLD AG is currently generating about -0.01 per unit of volatility. If you would invest 3,556 in KOWORLD AG on September 12, 2024 and sell it today you would lose (726.00) from holding KOWORLD AG or give up 20.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SIVERS SEMICONDUCTORS AB vs. KOWORLD AG
Performance |
| Timeline |
| SIVERS SEMICONDUCTORS |
| KOWORLD AG |
SIVERS SEMICONDUCTORS and KOWORLD AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SIVERS SEMICONDUCTORS and KOWORLD AG
The main advantage of trading using opposite SIVERS SEMICONDUCTORS and KOWORLD AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIVERS SEMICONDUCTORS position performs unexpectedly, KOWORLD AG 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 KOWORLD AG will offset losses from the drop in KOWORLD AG'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 |
| KOWORLD AG vs. Sabre Insurance Group | KOWORLD AG vs. Superior Plus Corp | KOWORLD AG vs. SIVERS SEMICONDUCTORS AB | KOWORLD AG vs. CHINA HUARONG ENERHD 50 |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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