Correlation Between SIVERS SEMICONDUCTORS and KAUFMAN ET

Can any of the company-specific risk be diversified away by investing in both SIVERS SEMICONDUCTORS and KAUFMAN ET 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 KAUFMAN ET 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 KAUFMAN ET BROAD, you can compare the effects of market volatilities on SIVERS SEMICONDUCTORS and KAUFMAN ET 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 KAUFMAN ET. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIVERS SEMICONDUCTORS and KAUFMAN ET.

Diversification Opportunities for SIVERS SEMICONDUCTORS and KAUFMAN ET

-0.58

Correlation Coefficient

SIVERS SEMICONDUCTORS  KAUFMAN ET

Excellent diversification

The 3 months correlation between SIVERS and KAUFMAN is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding SIVERS SEMICONDUCTORS AB and KAUFMAN ET BROAD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KAUFMAN ET BROAD 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 KAUFMAN ET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KAUFMAN ET BROAD has no effect on the direction of SIVERS SEMICONDUCTORS i.e., SIVERS SEMICONDUCTORS and KAUFMAN ET go up and down completely randomly.

Pair Corralation between SIVERS SEMICONDUCTORS and KAUFMAN ET

Assuming the 90 days horizon SIVERS SEMICONDUCTORS AB is expected to under-perform the KAUFMAN ET. In addition to that, SIVERS SEMICONDUCTORS is 1.6 times more volatile than KAUFMAN ET BROAD. It trades about -0.13 of its total potential returns per unit of risk. KAUFMAN ET BROAD is currently generating about 0.03 per unit of volatility. If you would invest  2,654  in KAUFMAN ET BROAD on March 22, 2024 and sell it today you would earn a total of  46.00  from holding KAUFMAN ET BROAD or generate 1.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

SIVERS SEMICONDUCTORS AB  vs.  KAUFMAN ET BROAD

SIVERS SEMICONDUCTORS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SIVERS SEMICONDUCTORS AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

KAUFMAN ET BROAD

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in KAUFMAN ET BROAD are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical indicators, KAUFMAN ET exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SIVERS SEMICONDUCTORS and KAUFMAN ET

The main advantage of trading using opposite SIVERS SEMICONDUCTORS and KAUFMAN ET positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIVERS SEMICONDUCTORS position performs unexpectedly, KAUFMAN ET 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 KAUFMAN ET will offset losses from the drop in KAUFMAN ET's long position.

The idea behind SIVERS SEMICONDUCTORS AB and KAUFMAN ET BROAD pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.