Correlation Between Navitas Semiconductor and Wolfspeed
Can any of the company-specific risk be diversified away by investing in both Navitas Semiconductor and Wolfspeed 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 Navitas Semiconductor and Wolfspeed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Navitas Semiconductor Corp and Wolfspeed, you can compare the effects of market volatilities on Navitas Semiconductor and Wolfspeed 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 Navitas Semiconductor with a short position of Wolfspeed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Navitas Semiconductor and Wolfspeed.
Diversification Opportunities for Navitas Semiconductor and Wolfspeed
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Navitas and Wolfspeed is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Navitas Semiconductor Corp and Wolfspeed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wolfspeed and Navitas 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 Navitas Semiconductor Corp are associated (or correlated) with Wolfspeed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wolfspeed has no effect on the direction of Navitas Semiconductor i.e., Navitas Semiconductor and Wolfspeed go up and down completely randomly.
Pair Corralation between Navitas Semiconductor and Wolfspeed
Given the investment horizon of 90 days Navitas Semiconductor Corp is expected to generate 0.51 times more return on investment than Wolfspeed. However, Navitas Semiconductor Corp is 1.95 times less risky than Wolfspeed. It trades about -0.18 of its potential returns per unit of risk. Wolfspeed is currently generating about -0.3 per unit of risk. If you would invest 260.00 in Navitas Semiconductor Corp on August 23, 2024 and sell it today you would lose (58.00) from holding Navitas Semiconductor Corp or give up 22.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Navitas Semiconductor Corp vs. Wolfspeed
Performance |
| Timeline |
| Navitas Semiconductor |
| Wolfspeed |
Navitas Semiconductor and Wolfspeed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Navitas Semiconductor and Wolfspeed
The main advantage of trading using opposite Navitas Semiconductor and Wolfspeed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Navitas Semiconductor position performs unexpectedly, Wolfspeed 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 Wolfspeed will offset losses from the drop in Wolfspeed's long position.| Navitas Semiconductor vs. ON Semiconductor | Navitas Semiconductor vs. Monolithic Power Systems | Navitas Semiconductor vs. Globalfoundries | Navitas Semiconductor vs. Analog Devices |
| Wolfspeed vs. NXP Semiconductors NV | Wolfspeed vs. Analog Devices | Wolfspeed vs. Microchip Technology | Wolfspeed vs. Monolithic Power Systems |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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