Correlation Between SemiLEDS and Silicon Motion
Can any of the company-specific risk be diversified away by investing in both SemiLEDS 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 SemiLEDS and Silicon Motion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SemiLEDS and Silicon Motion Technology, you can compare the effects of market volatilities on SemiLEDS 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 SemiLEDS with a short position of Silicon Motion. Check out your portfolio center. Please also check ongoing floating volatility patterns of SemiLEDS and Silicon Motion.
Diversification Opportunities for SemiLEDS and Silicon Motion
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between SemiLEDS and Silicon is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding SemiLEDS 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 SemiLEDS 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 SemiLEDS 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 SemiLEDS i.e., SemiLEDS and Silicon Motion go up and down completely randomly.
Pair Corralation between SemiLEDS and Silicon Motion
Given the investment horizon of 90 days SemiLEDS is expected to generate 2.02 times more return on investment than Silicon Motion. However, SemiLEDS is 2.02 times more volatile than Silicon Motion Technology. It trades about 0.0 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 234.00 in SemiLEDS on August 24, 2024 and sell it today you would lose (99.00) from holding SemiLEDS or give up 42.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SemiLEDS vs. Silicon Motion Technology
Performance |
| Timeline |
| SemiLEDS |
| Silicon Motion Technology |
SemiLEDS and Silicon Motion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SemiLEDS and Silicon Motion
The main advantage of trading using opposite SemiLEDS and Silicon Motion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SemiLEDS 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.| SemiLEDS vs. Wisekey International Holding | SemiLEDS vs. GSI Technology | SemiLEDS vs. SEALSQ Corp | SemiLEDS vs. WiSA Technologies |
| 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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