Correlation Between Semiconductor Bear and Alfi

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Can any of the company-specific risk be diversified away by investing in both Semiconductor Bear and Alfi 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 Semiconductor Bear and Alfi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Semiconductor Bear 3X and Alfi Inc, you can compare the effects of market volatilities on Semiconductor Bear and Alfi 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 Semiconductor Bear with a short position of Alfi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Semiconductor Bear and Alfi.

Diversification Opportunities for Semiconductor Bear and Alfi

-0.66
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Semiconductor and Alfi is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Semiconductor Bear 3X and Alfi Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfi Inc and Semiconductor Bear 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 Semiconductor Bear 3X are associated (or correlated) with Alfi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfi Inc has no effect on the direction of Semiconductor Bear i.e., Semiconductor Bear and Alfi go up and down completely randomly.

Pair Corralation between Semiconductor Bear and Alfi

Given the investment horizon of 90 days Semiconductor Bear 3X is expected to generate 1.33 times more return on investment than Alfi. However, Semiconductor Bear is 1.33 times more volatile than Alfi Inc. It trades about 0.03 of its potential returns per unit of risk. Alfi Inc is currently generating about -0.11 per unit of risk. If you would invest  7,080  in Semiconductor Bear 3X on June 27, 2022 and sell it today you would lose (780.00)  from holding Semiconductor Bear 3X or give up 11.02% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy99.6%
ValuesDaily Returns

Semiconductor Bear 3X  vs.  Alfi Inc

 Performance (%) 
       Timeline  
Semiconductor Bear 
Semiconductor Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Semiconductor Bear 3X are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Semiconductor Bear reported solid returns over the last few months and may actually be approaching a breakup point.

Semiconductor Price Channel

Alfi Inc 
Alfi Performance
0 of 100
Over the last 90 days Alfi Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's essential indicators remain rather sound which may send shares a bit higher in October 2022. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Alfi Price Channel

Semiconductor Bear and Alfi Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Semiconductor Bear and Alfi

The main advantage of trading using opposite Semiconductor Bear and Alfi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Semiconductor Bear position performs unexpectedly, Alfi 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 Alfi will offset losses from the drop in Alfi's long position.
Semiconductor Bear vs. Hp Inc
The idea behind Semiconductor Bear 3X and Alfi 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.
Alfi vs. Industrias Bachoco SA
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.

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