Correlation Between Silicon Motion and Allianz SE
Can any of the company-specific risk be diversified away by investing in both Silicon Motion and Allianz SE 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 Allianz SE 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 Allianz SE VNA, you can compare the effects of market volatilities on Silicon Motion and Allianz SE 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 Allianz SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silicon Motion and Allianz SE.
Diversification Opportunities for Silicon Motion and Allianz SE
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Silicon and Allianz is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Silicon Motion Technology and Allianz SE VNA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianz SE VNA 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 Allianz SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianz SE VNA has no effect on the direction of Silicon Motion i.e., Silicon Motion and Allianz SE go up and down completely randomly.
Pair Corralation between Silicon Motion and Allianz SE
Assuming the 90 days trading horizon Silicon Motion Technology is expected to under-perform the Allianz SE. In addition to that, Silicon Motion is 2.21 times more volatile than Allianz SE VNA. It trades about -0.01 of its total potential returns per unit of risk. Allianz SE VNA is currently generating about 0.1 per unit of volatility. If you would invest 18,502 in Allianz SE VNA on September 3, 2024 and sell it today you would earn a total of 10,718 from holding Allianz SE VNA or generate 57.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Silicon Motion Technology vs. Allianz SE VNA
Performance |
| Timeline |
| Silicon Motion Technology |
| Allianz SE VNA |
Silicon Motion and Allianz SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Silicon Motion and Allianz SE
The main advantage of trading using opposite Silicon Motion and Allianz SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silicon Motion position performs unexpectedly, Allianz SE 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 Allianz SE will offset losses from the drop in Allianz SE's long position.| Silicon Motion vs. Apple Inc | Silicon Motion vs. Apple Inc | Silicon Motion vs. Apple Inc | Silicon Motion vs. Apple Inc |
| Allianz SE vs. UNIVMUSIC GRPADR050 | Allianz SE vs. CeoTronics AG | Allianz SE vs. CVS Health | Allianz SE vs. Warner Music Group |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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