Correlation Between Power Integrations and Melexis NV
Can any of the company-specific risk be diversified away by investing in both Power Integrations and Melexis NV 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 Power Integrations and Melexis NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Power Integrations and Melexis NV, you can compare the effects of market volatilities on Power Integrations and Melexis NV 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 Power Integrations with a short position of Melexis NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Power Integrations and Melexis NV.
Diversification Opportunities for Power Integrations and Melexis NV
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Power and Melexis is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Power Integrations and Melexis NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Melexis NV and Power Integrations 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 Power Integrations are associated (or correlated) with Melexis NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Melexis NV has no effect on the direction of Power Integrations i.e., Power Integrations and Melexis NV go up and down completely randomly.
Pair Corralation between Power Integrations and Melexis NV
If you would invest 6,327 in Power Integrations on September 3, 2024 and sell it today you would earn a total of 386.00 from holding Power Integrations or generate 6.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Power Integrations vs. Melexis NV
Performance |
| Timeline |
| Power Integrations |
| Melexis NV |
Power Integrations and Melexis NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Power Integrations and Melexis NV
The main advantage of trading using opposite Power Integrations and Melexis NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Power Integrations position performs unexpectedly, Melexis NV 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 Melexis NV will offset losses from the drop in Melexis NV's long position.| Power Integrations vs. Diodes Incorporated | Power Integrations vs. MACOM Technology Solutions | Power Integrations vs. Cirrus Logic | Power Integrations vs. Amkor Technology |
| Melexis NV vs. Rivian Automotive | Melexis NV vs. Wabash National | Melexis NV vs. FactSet Research Systems | Melexis NV vs. Gentex |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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