Correlation Between EVN AG and Silicon Motion
Can any of the company-specific risk be diversified away by investing in both EVN AG 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 EVN AG and Silicon Motion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EVN AG and Silicon Motion Technology, you can compare the effects of market volatilities on EVN AG 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 EVN AG with a short position of Silicon Motion. Check out your portfolio center. Please also check ongoing floating volatility patterns of EVN AG and Silicon Motion.
Diversification Opportunities for EVN AG and Silicon Motion
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between EVN and Silicon is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding EVN AG 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 EVN AG 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 EVN AG 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 EVN AG i.e., EVN AG and Silicon Motion go up and down completely randomly.
Pair Corralation between EVN AG and Silicon Motion
Assuming the 90 days horizon EVN AG is expected to generate 0.59 times more return on investment than Silicon Motion. However, EVN AG is 1.7 times less risky than Silicon Motion. It trades about 0.12 of its potential returns per unit of risk. Silicon Motion Technology is currently generating about -0.01 per unit of risk. If you would invest 2,220 in EVN AG on November 3, 2024 and sell it today you would earn a total of 70.00 from holding EVN AG or generate 3.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EVN AG vs. Silicon Motion Technology
Performance |
| Timeline |
| EVN AG |
| Silicon Motion Technology |
EVN AG and Silicon Motion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EVN AG and Silicon Motion
The main advantage of trading using opposite EVN AG and Silicon Motion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EVN AG 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.| EVN AG vs. British American Tobacco | EVN AG vs. VELA TECHNOLPLC LS 0001 | EVN AG vs. Cairo Communication SpA | EVN AG vs. Agilent Technologies |
| Silicon Motion vs. BE Semiconductor Industries | Silicon Motion vs. Taiwan Semiconductor Manufacturing | Silicon Motion vs. National Retail Properties | Silicon Motion vs. Salesforce |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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