Correlation Between Great-West Lifeco and SIVERS SEMICONDUCTORS
Can any of the company-specific risk be diversified away by investing in both Great-West Lifeco and SIVERS SEMICONDUCTORS 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 Great-West Lifeco and SIVERS SEMICONDUCTORS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great West Lifeco and SIVERS SEMICONDUCTORS AB, you can compare the effects of market volatilities on Great-West Lifeco and SIVERS SEMICONDUCTORS 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 Great-West Lifeco with a short position of SIVERS SEMICONDUCTORS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great-West Lifeco and SIVERS SEMICONDUCTORS.
Diversification Opportunities for Great-West Lifeco and SIVERS SEMICONDUCTORS
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Great-West and SIVERS is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Great West Lifeco and SIVERS SEMICONDUCTORS AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIVERS SEMICONDUCTORS and Great-West Lifeco 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 Great West Lifeco are associated (or correlated) with SIVERS SEMICONDUCTORS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIVERS SEMICONDUCTORS has no effect on the direction of Great-West Lifeco i.e., Great-West Lifeco and SIVERS SEMICONDUCTORS go up and down completely randomly.
Pair Corralation between Great-West Lifeco and SIVERS SEMICONDUCTORS
Assuming the 90 days horizon Great-West Lifeco is expected to generate 1.66 times less return on investment than SIVERS SEMICONDUCTORS. But when comparing it to its historical volatility, Great West Lifeco is 6.34 times less risky than SIVERS SEMICONDUCTORS. It trades about 0.06 of its potential returns per unit of risk. SIVERS SEMICONDUCTORS AB is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 39.00 in SIVERS SEMICONDUCTORS AB on October 22, 2024 and sell it today you would lose (11.00) from holding SIVERS SEMICONDUCTORS AB or give up 28.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.56% |
| Values | Daily Returns |
Great West Lifeco vs. SIVERS SEMICONDUCTORS AB
Performance |
| Timeline |
| Great West Lifeco |
| SIVERS SEMICONDUCTORS |
Great-West Lifeco and SIVERS SEMICONDUCTORS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great-West Lifeco and SIVERS SEMICONDUCTORS
The main advantage of trading using opposite Great-West Lifeco and SIVERS SEMICONDUCTORS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great-West Lifeco position performs unexpectedly, SIVERS SEMICONDUCTORS 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 SIVERS SEMICONDUCTORS will offset losses from the drop in SIVERS SEMICONDUCTORS's long position.| Great-West Lifeco vs. Mitsubishi Materials | Great-West Lifeco vs. NXP Semiconductors NV | Great-West Lifeco vs. Compagnie Plastic Omnium | Great-West Lifeco vs. THRACE PLASTICS |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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