Correlation Between Silergy Corp and Advanced Analog
Can any of the company-specific risk be diversified away by investing in both Silergy Corp and Advanced Analog 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 Silergy Corp and Advanced Analog into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Silergy Corp and Advanced Analog Technology, you can compare the effects of market volatilities on Silergy Corp and Advanced Analog 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 Silergy Corp with a short position of Advanced Analog. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silergy Corp and Advanced Analog.
Diversification Opportunities for Silergy Corp and Advanced Analog
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Silergy and Advanced is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Silergy Corp and Advanced Analog Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Analog Tech and Silergy Corp 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 Silergy Corp are associated (or correlated) with Advanced Analog. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Analog Tech has no effect on the direction of Silergy Corp i.e., Silergy Corp and Advanced Analog go up and down completely randomly.
Pair Corralation between Silergy Corp and Advanced Analog
Assuming the 90 days trading horizon Silergy Corp is expected to generate 0.82 times more return on investment than Advanced Analog. However, Silergy Corp is 1.22 times less risky than Advanced Analog. It trades about 0.1 of its potential returns per unit of risk. Advanced Analog Technology is currently generating about -0.03 per unit of risk. If you would invest 37,900 in Silergy Corp on November 2, 2024 and sell it today you would earn a total of 1,400 from holding Silergy Corp or generate 3.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Silergy Corp vs. Advanced Analog Technology
Performance |
| Timeline |
| Silergy Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Advanced Analog Tech |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Silergy Corp and Advanced Analog Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Silergy Corp and Advanced Analog
The main advantage of trading using opposite Silergy Corp and Advanced Analog positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silergy Corp position performs unexpectedly, Advanced Analog 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 Advanced Analog will offset losses from the drop in Advanced Analog's long position.The idea behind Silergy Corp and Advanced Analog Technology 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.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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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