Correlation Between Maxeon Solar and Silicon Motion
Can any of the company-specific risk be diversified away by investing in both Maxeon Solar 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 Maxeon Solar and Silicon Motion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maxeon Solar Technologies and Silicon Motion Technology, you can compare the effects of market volatilities on Maxeon Solar 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 Maxeon Solar with a short position of Silicon Motion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maxeon Solar and Silicon Motion.
Diversification Opportunities for Maxeon Solar and Silicon Motion
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Maxeon and Silicon is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Maxeon Solar Technologies 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 Maxeon Solar 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 Maxeon Solar Technologies 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 Maxeon Solar i.e., Maxeon Solar and Silicon Motion go up and down completely randomly.
Pair Corralation between Maxeon Solar and Silicon Motion
Given the investment horizon of 90 days Maxeon Solar Technologies is expected to under-perform the Silicon Motion. In addition to that, Maxeon Solar is 2.26 times more volatile than Silicon Motion Technology. It trades about -0.39 of its total potential returns per unit of risk. Silicon Motion Technology is currently generating about 0.16 per unit of volatility. If you would invest 5,144 in Silicon Motion Technology on December 4, 2024 and sell it today you would earn a total of 401.00 from holding Silicon Motion Technology or generate 7.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Maxeon Solar Technologies vs. Silicon Motion Technology
Performance |
| Timeline |
| Maxeon Solar Technologies |
| Silicon Motion Technology |
Maxeon Solar and Silicon Motion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maxeon Solar and Silicon Motion
The main advantage of trading using opposite Maxeon Solar and Silicon Motion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maxeon Solar 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.| Maxeon Solar vs. Sunrun Inc | Maxeon Solar vs. Canadian Solar | Maxeon Solar vs. First Solar | Maxeon Solar vs. Sunnova Energy International |
| 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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