Correlation Between Cohu and Silicon Laboratories
Can any of the company-specific risk be diversified away by investing in both Cohu and Silicon Laboratories 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 Cohu and Silicon Laboratories into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cohu Inc and Silicon Laboratories, you can compare the effects of market volatilities on Cohu and Silicon Laboratories 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 Cohu with a short position of Silicon Laboratories. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cohu and Silicon Laboratories.
Diversification Opportunities for Cohu and Silicon Laboratories
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cohu and Silicon is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Cohu Inc and Silicon Laboratories in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silicon Laboratories and Cohu 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 Cohu Inc are associated (or correlated) with Silicon Laboratories. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silicon Laboratories has no effect on the direction of Cohu i.e., Cohu and Silicon Laboratories go up and down completely randomly.
Pair Corralation between Cohu and Silicon Laboratories
Given the investment horizon of 90 days Cohu Inc is expected to under-perform the Silicon Laboratories. But the stock apears to be less risky and, when comparing its historical volatility, Cohu Inc is 1.05 times less risky than Silicon Laboratories. The stock trades about -0.24 of its potential returns per unit of risk. The Silicon Laboratories is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 12,805 in Silicon Laboratories on November 9, 2024 and sell it today you would earn a total of 1,935 from holding Silicon Laboratories or generate 15.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cohu Inc vs. Silicon Laboratories
Performance |
| Timeline |
| Cohu Inc |
| Silicon Laboratories |
Cohu and Silicon Laboratories Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cohu and Silicon Laboratories
The main advantage of trading using opposite Cohu and Silicon Laboratories positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cohu position performs unexpectedly, Silicon Laboratories 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 Silicon Laboratories will offset losses from the drop in Silicon Laboratories' long position.| Cohu vs. Onto Innovation | Cohu vs. Photronics | Cohu vs. Ultra Clean Holdings | Cohu vs. Axcelis Technologies |
| Silicon Laboratories vs. Diodes Incorporated | Silicon Laboratories vs. MACOM Technology Solutions | Silicon Laboratories vs. FormFactor | Silicon Laboratories vs. Amkor Technology |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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