Correlation Between Marvell Technology and Silicon Motion
Can any of the company-specific risk be diversified away by investing in both Marvell Technology 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 Marvell Technology and Silicon Motion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marvell Technology Group and Silicon Motion Technology, you can compare the effects of market volatilities on Marvell Technology 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 Marvell Technology with a short position of Silicon Motion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marvell Technology and Silicon Motion.
Diversification Opportunities for Marvell Technology and Silicon Motion
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Marvell and Silicon is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Marvell Technology Group 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 Marvell Technology 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 Marvell Technology Group 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 Marvell Technology i.e., Marvell Technology and Silicon Motion go up and down completely randomly.
Pair Corralation between Marvell Technology and Silicon Motion
Given the investment horizon of 90 days Marvell Technology Group is expected to generate 1.57 times more return on investment than Silicon Motion. However, Marvell Technology is 1.57 times more volatile than Silicon Motion Technology. It trades about 0.1 of its potential returns per unit of risk. Silicon Motion Technology is currently generating about 0.02 per unit of risk. If you would invest 5,618 in Marvell Technology Group on September 14, 2024 and sell it today you would earn a total of 6,182 from holding Marvell Technology Group or generate 110.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marvell Technology Group vs. Silicon Motion Technology
Performance |
| Timeline |
| Marvell Technology |
| Silicon Motion Technology |
Marvell Technology and Silicon Motion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marvell Technology and Silicon Motion
The main advantage of trading using opposite Marvell Technology and Silicon Motion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marvell Technology 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.| Marvell Technology vs. ON Semiconductor | Marvell Technology vs. Globalfoundries | Marvell Technology vs. Wisekey International Holding | Marvell Technology vs. Nano Labs |
| Silicon Motion vs. ON Semiconductor | Silicon Motion vs. Globalfoundries | Silicon Motion vs. Wisekey International Holding | Silicon Motion vs. Nano Labs |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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