Correlation Between Silicon Motion and MOVIE GAMES
Can any of the company-specific risk be diversified away by investing in both Silicon Motion and MOVIE GAMES 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 Silicon Motion and MOVIE GAMES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Silicon Motion Technology and MOVIE GAMES SA, you can compare the effects of market volatilities on Silicon Motion and MOVIE GAMES 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 Silicon Motion with a short position of MOVIE GAMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silicon Motion and MOVIE GAMES.
Diversification Opportunities for Silicon Motion and MOVIE GAMES
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Silicon and MOVIE is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Silicon Motion Technology and MOVIE GAMES SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOVIE GAMES SA and Silicon Motion 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 Silicon Motion Technology are associated (or correlated) with MOVIE GAMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOVIE GAMES SA has no effect on the direction of Silicon Motion i.e., Silicon Motion and MOVIE GAMES go up and down completely randomly.
Pair Corralation between Silicon Motion and MOVIE GAMES
Assuming the 90 days trading horizon Silicon Motion Technology is expected to generate 1.19 times more return on investment than MOVIE GAMES. However, Silicon Motion is 1.19 times more volatile than MOVIE GAMES SA. It trades about -0.05 of its potential returns per unit of risk. MOVIE GAMES SA is currently generating about -0.3 per unit of risk. If you would invest 5,395 in Silicon Motion Technology on September 3, 2024 and sell it today you would lose (475.00) from holding Silicon Motion Technology or give up 8.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Silicon Motion Technology vs. MOVIE GAMES SA
Performance |
| Timeline |
| Silicon Motion Technology |
| MOVIE GAMES SA |
Silicon Motion and MOVIE GAMES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Silicon Motion and MOVIE GAMES
The main advantage of trading using opposite Silicon Motion and MOVIE GAMES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silicon Motion position performs unexpectedly, MOVIE GAMES 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 MOVIE GAMES will offset losses from the drop in MOVIE GAMES's long position.| Silicon Motion vs. Apple Inc | Silicon Motion vs. Apple Inc | Silicon Motion vs. Apple Inc | Silicon Motion vs. Apple Inc |
| MOVIE GAMES vs. LION ONE METALS | MOVIE GAMES vs. Silicon Motion Technology | MOVIE GAMES vs. Perseus Mining Limited | MOVIE GAMES vs. China BlueChemical |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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