Correlation Between LOréal SA and SIVERS SEMICONDUCTORS
Can any of the company-specific risk be diversified away by investing in both LOréal SA 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 LOréal SA and SIVERS SEMICONDUCTORS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LOral SA and SIVERS SEMICONDUCTORS AB, you can compare the effects of market volatilities on LOréal SA 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 LOréal SA with a short position of SIVERS SEMICONDUCTORS. Check out your portfolio center. Please also check ongoing floating volatility patterns of LOréal SA and SIVERS SEMICONDUCTORS.
Diversification Opportunities for LOréal SA and SIVERS SEMICONDUCTORS
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between LOréal and SIVERS is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding LOral SA and SIVERS SEMICONDUCTORS AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIVERS SEMICONDUCTORS and LOréal SA 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 LOral SA 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 LOréal SA i.e., LOréal SA and SIVERS SEMICONDUCTORS go up and down completely randomly.
Pair Corralation between LOréal SA and SIVERS SEMICONDUCTORS
Assuming the 90 days horizon LOral SA is expected to under-perform the SIVERS SEMICONDUCTORS. But the stock apears to be less risky and, when comparing its historical volatility, LOral SA is 3.32 times less risky than SIVERS SEMICONDUCTORS. The stock trades about -0.1 of its potential returns per unit of risk. The SIVERS SEMICONDUCTORS AB is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 26.00 in SIVERS SEMICONDUCTORS AB on November 28, 2024 and sell it today you would earn a total of 8.00 from holding SIVERS SEMICONDUCTORS AB or generate 30.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LOral SA vs. SIVERS SEMICONDUCTORS AB
Performance |
| Timeline |
| LOréal SA |
| SIVERS SEMICONDUCTORS |
LOréal SA and SIVERS SEMICONDUCTORS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LOréal SA and SIVERS SEMICONDUCTORS
The main advantage of trading using opposite LOréal SA and SIVERS SEMICONDUCTORS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LOréal SA 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.| LOréal SA vs. China Resources Beer | LOréal SA vs. RETAIL FOOD GROUP | LOréal SA vs. MARKET VECTR RETAIL | LOréal SA vs. Retail Estates NV |
| SIVERS SEMICONDUCTORS vs. GOME Retail Holdings | SIVERS SEMICONDUCTORS vs. MARKET VECTR RETAIL | SIVERS SEMICONDUCTORS vs. Casio Computer CoLtd | SIVERS SEMICONDUCTORS vs. Computershare Limited |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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