Correlation Between Shoprite Holdings and SIVERS SEMICONDUCTORS
Can any of the company-specific risk be diversified away by investing in both Shoprite Holdings 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 Shoprite Holdings and SIVERS SEMICONDUCTORS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shoprite Holdings Limited and SIVERS SEMICONDUCTORS AB, you can compare the effects of market volatilities on Shoprite Holdings 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 Shoprite Holdings with a short position of SIVERS SEMICONDUCTORS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shoprite Holdings and SIVERS SEMICONDUCTORS.
Diversification Opportunities for Shoprite Holdings and SIVERS SEMICONDUCTORS
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Shoprite and SIVERS is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Shoprite Holdings Limited and SIVERS SEMICONDUCTORS AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIVERS SEMICONDUCTORS and Shoprite Holdings 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 Shoprite Holdings Limited 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 Shoprite Holdings i.e., Shoprite Holdings and SIVERS SEMICONDUCTORS go up and down completely randomly.
Pair Corralation between Shoprite Holdings and SIVERS SEMICONDUCTORS
Assuming the 90 days horizon Shoprite Holdings Limited is expected to generate 0.12 times more return on investment than SIVERS SEMICONDUCTORS. However, Shoprite Holdings Limited is 8.15 times less risky than SIVERS SEMICONDUCTORS. It trades about -0.01 of its potential returns per unit of risk. SIVERS SEMICONDUCTORS AB is currently generating about -0.1 per unit of risk. If you would invest 1,560 in Shoprite Holdings Limited on September 1, 2024 and sell it today you would lose (10.00) from holding Shoprite Holdings Limited or give up 0.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Shoprite Holdings Limited vs. SIVERS SEMICONDUCTORS AB
Performance |
| Timeline |
| Shoprite Holdings |
| SIVERS SEMICONDUCTORS |
Shoprite Holdings and SIVERS SEMICONDUCTORS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shoprite Holdings and SIVERS SEMICONDUCTORS
The main advantage of trading using opposite Shoprite Holdings and SIVERS SEMICONDUCTORS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shoprite Holdings 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.| Shoprite Holdings vs. AIR PRODCHEMICALS | Shoprite Holdings vs. PTT Global Chemical | Shoprite Holdings vs. Silicon Motion Technology | Shoprite Holdings vs. BRIT AMER TOBACCO |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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