Correlation Between Advanced Micro and Navitas Semiconductor
Can any of the company-specific risk be diversified away by investing in both Advanced Micro 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 Advanced Micro and Navitas Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Micro Devices and Navitas Semiconductor Corp, you can compare the effects of market volatilities on Advanced Micro 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 Advanced Micro with a short position of Navitas Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Micro and Navitas Semiconductor.
Diversification Opportunities for Advanced Micro and Navitas Semiconductor
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Advanced and Navitas is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Micro 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 Advanced Micro 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 Advanced Micro 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 Advanced Micro i.e., Advanced Micro and Navitas Semiconductor go up and down completely randomly.
Pair Corralation between Advanced Micro and Navitas Semiconductor
Considering the 90-day investment horizon Advanced Micro Devices is expected to under-perform the Navitas Semiconductor. But the stock apears to be less risky and, when comparing its historical volatility, Advanced Micro Devices is 4.39 times less risky than Navitas Semiconductor. The stock trades about -0.06 of its potential returns per unit of risk. The Navitas Semiconductor Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 261.00 in Navitas Semiconductor Corp on September 3, 2024 and sell it today you would earn a total of 14.00 from holding Navitas Semiconductor Corp or generate 5.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Micro Devices vs. Navitas Semiconductor Corp
Performance |
| Timeline |
| Advanced Micro Devices |
| Navitas Semiconductor |
Advanced Micro and Navitas Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Micro and Navitas Semiconductor
The main advantage of trading using opposite Advanced Micro and Navitas Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Micro 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.| Advanced Micro vs. Taiwan Semiconductor Manufacturing | Advanced Micro vs. Intel | Advanced Micro vs. Marvell Technology Group | Advanced Micro vs. Micron 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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