Correlation Between Cirrus Logic and Silicon Motion
Can any of the company-specific risk be diversified away by investing in both Cirrus Logic and Silicon Motion 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 Cirrus Logic and Silicon Motion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cirrus Logic and Silicon Motion Technology, you can compare the effects of market volatilities on Cirrus Logic and Silicon Motion 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 Cirrus Logic with a short position of Silicon Motion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cirrus Logic and Silicon Motion.
Diversification Opportunities for Cirrus Logic and Silicon Motion
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cirrus and Silicon is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Cirrus Logic and Silicon Motion Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silicon Motion Technology and Cirrus Logic 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 Cirrus Logic are associated (or correlated) with Silicon Motion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silicon Motion Technology has no effect on the direction of Cirrus Logic i.e., Cirrus Logic and Silicon Motion go up and down completely randomly.
Pair Corralation between Cirrus Logic and Silicon Motion
Given the investment horizon of 90 days Cirrus Logic is expected to under-perform the Silicon Motion. But the stock apears to be less risky and, when comparing its historical volatility, Cirrus Logic is 1.11 times less risky than Silicon Motion. The stock trades about -0.32 of its potential returns per unit of risk. The Silicon Motion Technology is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 5,646 in Silicon Motion Technology on August 23, 2024 and sell it today you would lose (166.00) from holding Silicon Motion Technology or give up 2.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cirrus Logic vs. Silicon Motion Technology
Performance |
| Timeline |
| Cirrus Logic |
| Silicon Motion Technology |
Cirrus Logic and Silicon Motion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cirrus Logic and Silicon Motion
The main advantage of trading using opposite Cirrus Logic and Silicon Motion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cirrus Logic position performs unexpectedly, Silicon Motion 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 Motion will offset losses from the drop in Silicon Motion's long position.| Cirrus Logic vs. Skyworks Solutions | Cirrus Logic vs. Qorvo Inc | Cirrus Logic vs. Analog Devices | Cirrus Logic vs. Lattice Semiconductor |
| Silicon Motion vs. ASE Industrial Holding | Silicon Motion vs. United Microelectronics | Silicon Motion vs. ChipMOS Technologies | Silicon Motion vs. SemiLEDS |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |