Correlation Between SIMCERE PHARMAC and SIVERS SEMICONDUCTORS
Can any of the company-specific risk be diversified away by investing in both SIMCERE PHARMAC 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 SIMCERE PHARMAC and SIVERS SEMICONDUCTORS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SIMCERE PHARMAC GRP and SIVERS SEMICONDUCTORS AB, you can compare the effects of market volatilities on SIMCERE PHARMAC 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 SIMCERE PHARMAC with a short position of SIVERS SEMICONDUCTORS. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIMCERE PHARMAC and SIVERS SEMICONDUCTORS.
Diversification Opportunities for SIMCERE PHARMAC and SIVERS SEMICONDUCTORS
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SIMCERE and SIVERS is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding SIMCERE PHARMAC GRP and SIVERS SEMICONDUCTORS AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIVERS SEMICONDUCTORS and SIMCERE PHARMAC 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 SIMCERE PHARMAC GRP 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 SIMCERE PHARMAC i.e., SIMCERE PHARMAC and SIVERS SEMICONDUCTORS go up and down completely randomly.
Pair Corralation between SIMCERE PHARMAC and SIVERS SEMICONDUCTORS
Assuming the 90 days horizon SIMCERE PHARMAC GRP is expected to generate 0.59 times more return on investment than SIVERS SEMICONDUCTORS. However, SIMCERE PHARMAC GRP is 1.71 times less risky than SIVERS SEMICONDUCTORS. It trades about 0.05 of its potential returns per unit of risk. SIVERS SEMICONDUCTORS AB is currently generating about -0.03 per unit of risk. If you would invest 53.00 in SIMCERE PHARMAC GRP on September 4, 2024 and sell it today you would earn a total of 31.00 from holding SIMCERE PHARMAC GRP or generate 58.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SIMCERE PHARMAC GRP vs. SIVERS SEMICONDUCTORS AB
Performance |
| Timeline |
| SIMCERE PHARMAC GRP |
| SIVERS SEMICONDUCTORS |
SIMCERE PHARMAC and SIVERS SEMICONDUCTORS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SIMCERE PHARMAC and SIVERS SEMICONDUCTORS
The main advantage of trading using opposite SIMCERE PHARMAC and SIVERS SEMICONDUCTORS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIMCERE PHARMAC 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.| SIMCERE PHARMAC vs. Merck KGaA | SIMCERE PHARMAC vs. Superior Plus Corp | SIMCERE PHARMAC vs. NMI Holdings | SIMCERE PHARMAC vs. Origin Agritech |
| SIVERS SEMICONDUCTORS vs. NVIDIA | SIVERS SEMICONDUCTORS vs. Taiwan Semiconductor Manufacturing | SIVERS SEMICONDUCTORS vs. Advanced Micro Devices | SIVERS SEMICONDUCTORS vs. Intel |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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