Correlation Between Infineon Technologies and Silicon Laboratories
Can any of the company-specific risk be diversified away by investing in both Infineon Technologies 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 Infineon Technologies and Silicon Laboratories into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Infineon Technologies AG and Silicon Laboratories, you can compare the effects of market volatilities on Infineon Technologies 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 Infineon Technologies with a short position of Silicon Laboratories. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infineon Technologies and Silicon Laboratories.
Diversification Opportunities for Infineon Technologies and Silicon Laboratories
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Infineon and Silicon is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Infineon Technologies AG and Silicon Laboratories in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silicon Laboratories and Infineon Technologies 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 Infineon Technologies AG 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 Infineon Technologies i.e., Infineon Technologies and Silicon Laboratories go up and down completely randomly.
Pair Corralation between Infineon Technologies and Silicon Laboratories
If you would invest 4,082 in Infineon Technologies AG on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Infineon Technologies AG or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Infineon Technologies AG vs. Silicon Laboratories
Performance |
| Timeline |
| Infineon Technologies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Silicon Laboratories |
Infineon Technologies and Silicon Laboratories Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Infineon Technologies and Silicon Laboratories
The main advantage of trading using opposite Infineon Technologies and Silicon Laboratories positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infineon Technologies 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.| Infineon Technologies vs. Renesas Electronics | Infineon Technologies vs. Power Integrations | Infineon Technologies vs. Rohm Co Ltd | Infineon Technologies vs. MACOM Technology Solutions |
| Silicon Laboratories vs. MACOM Technology Solutions | Silicon Laboratories vs. FormFactor | Silicon Laboratories vs. MaxLinear | Silicon Laboratories vs. nLIGHT Inc |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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