Correlation Between Lattice Semiconductor and STMicroelectronics
Can any of the company-specific risk be diversified away by investing in both Lattice Semiconductor and STMicroelectronics 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 Lattice Semiconductor and STMicroelectronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lattice Semiconductor and STMicroelectronics NV ADR, you can compare the effects of market volatilities on Lattice Semiconductor and STMicroelectronics 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 Lattice Semiconductor with a short position of STMicroelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lattice Semiconductor and STMicroelectronics.
Diversification Opportunities for Lattice Semiconductor and STMicroelectronics
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lattice and STMicroelectronics is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Lattice Semiconductor and STMicroelectronics NV ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STMicroelectronics NV ADR and Lattice Semiconductor 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 Lattice Semiconductor are associated (or correlated) with STMicroelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STMicroelectronics NV ADR has no effect on the direction of Lattice Semiconductor i.e., Lattice Semiconductor and STMicroelectronics go up and down completely randomly.
Pair Corralation between Lattice Semiconductor and STMicroelectronics
Given the investment horizon of 90 days Lattice Semiconductor is expected to under-perform the STMicroelectronics. In addition to that, Lattice Semiconductor is 1.52 times more volatile than STMicroelectronics NV ADR. It trades about -0.43 of its total potential returns per unit of risk. STMicroelectronics NV ADR is currently generating about -0.45 per unit of volatility. If you would invest 2,496 in STMicroelectronics NV ADR on January 7, 2025 and sell it today you would lose (647.00) from holding STMicroelectronics NV ADR or give up 25.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lattice Semiconductor vs. STMicroelectronics NV ADR
Performance |
| Timeline |
| Lattice Semiconductor |
| STMicroelectronics NV ADR |
Lattice Semiconductor and STMicroelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lattice Semiconductor and STMicroelectronics
The main advantage of trading using opposite Lattice Semiconductor and STMicroelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lattice Semiconductor position performs unexpectedly, STMicroelectronics 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 STMicroelectronics will offset losses from the drop in STMicroelectronics' long position.| Lattice Semiconductor vs. Qorvo Inc | ||
| Lattice Semiconductor vs. Sitime | ||
| Lattice Semiconductor vs. Microchip Technology | ||
| Lattice Semiconductor vs. Silicon Laboratories |
| STMicroelectronics vs. NXP Semiconductors NV | ||
| STMicroelectronics vs. Analog Devices | ||
| STMicroelectronics vs. ON Semiconductor | ||
| STMicroelectronics vs. Lattice Semiconductor |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |