Correlation Between SIVERS SEMICONDUCTORS and AbbVie

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

Diversification Opportunities for SIVERS SEMICONDUCTORS and AbbVie

0.46

Correlation Coefficient

SIVERS SEMICONDUCTORS  AbbVie

Very weak diversification

The 3 months correlation between SIVERS and AbbVie is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding SIVERS SEMICONDUCTORS AB and AbbVie Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AbbVie Inc 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 AbbVie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AbbVie Inc has no effect on the direction of SIVERS SEMICONDUCTORS i.e., SIVERS SEMICONDUCTORS and AbbVie go up and down completely randomly.

Pair Corralation between SIVERS SEMICONDUCTORS and AbbVie

Assuming the 90 days horizon SIVERS SEMICONDUCTORS AB is expected to under-perform the AbbVie. In addition to that, SIVERS SEMICONDUCTORS is 3.62 times more volatile than AbbVie Inc. It trades about -0.11 of its total potential returns per unit of risk. AbbVie Inc is currently generating about 0.0 per unit of volatility. If you would invest  17,790  in AbbVie Inc on September 1, 2024 and sell it today you would lose (394.00) from holding AbbVie Inc or give up 2.21% of portfolio value over 90 days.

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

SIVERS SEMICONDUCTORS AB  vs.  AbbVie Inc

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 fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

AbbVie Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AbbVie Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, AbbVie is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with SIVERS SEMICONDUCTORS and AbbVie

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

The idea behind SIVERS SEMICONDUCTORS AB and AbbVie Inc 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.