Correlation Between Analog Devices and Navitas Semiconductor
Can any of the company-specific risk be diversified away by investing in both Analog Devices and Navitas Semiconductor 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 Analog Devices and Navitas Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Analog Devices and Navitas Semiconductor Corp, you can compare the effects of market volatilities on Analog Devices and Navitas Semiconductor 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 Analog Devices with a short position of Navitas Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Analog Devices and Navitas Semiconductor.
Diversification Opportunities for Analog Devices and Navitas Semiconductor
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Analog and Navitas is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Analog Devices and Navitas Semiconductor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Navitas Semiconductor and Analog Devices 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 Analog Devices are associated (or correlated) with Navitas Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Navitas Semiconductor has no effect on the direction of Analog Devices i.e., Analog Devices and Navitas Semiconductor go up and down completely randomly.
Pair Corralation between Analog Devices and Navitas Semiconductor
Considering the 90-day investment horizon Analog Devices is expected to generate 0.44 times more return on investment than Navitas Semiconductor. However, Analog Devices is 2.27 times less risky than Navitas Semiconductor. It trades about 0.05 of its potential returns per unit of risk. Navitas Semiconductor Corp is currently generating about -0.07 per unit of risk. If you would invest 18,018 in Analog Devices on August 26, 2024 and sell it today you would earn a total of 3,441 from holding Analog Devices or generate 19.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Analog Devices vs. Navitas Semiconductor Corp
Performance |
| Timeline |
| Analog Devices |
| Navitas Semiconductor |
Analog Devices and Navitas Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Analog Devices and Navitas Semiconductor
The main advantage of trading using opposite Analog Devices and Navitas Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Analog Devices position performs unexpectedly, Navitas Semiconductor 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 Navitas Semiconductor will offset losses from the drop in Navitas Semiconductor's long position.| Analog Devices vs. NXP Semiconductors NV | Analog Devices vs. Qualcomm Incorporated | Analog Devices vs. Broadcom | Analog Devices vs. Microchip Technology |
| Navitas Semiconductor vs. ON Semiconductor | Navitas Semiconductor vs. Monolithic Power Systems | Navitas Semiconductor vs. Globalfoundries | Navitas Semiconductor vs. Analog Devices |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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