Correlation Between Silicon Motion and Tradegate
Can any of the company-specific risk be diversified away by investing in both Silicon Motion and Tradegate 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 Tradegate 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 Tradegate AG Wertpapierhandelsbank, you can compare the effects of market volatilities on Silicon Motion and Tradegate 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 Tradegate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silicon Motion and Tradegate.
Diversification Opportunities for Silicon Motion and Tradegate
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Silicon and Tradegate is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Silicon Motion Technology and Tradegate AG Wertpapierhandels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tradegate AG Wertpap 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 Tradegate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tradegate AG Wertpap has no effect on the direction of Silicon Motion i.e., Silicon Motion and Tradegate go up and down completely randomly.
Pair Corralation between Silicon Motion and Tradegate
Assuming the 90 days trading horizon Silicon Motion Technology is expected to generate 1.52 times more return on investment than Tradegate. However, Silicon Motion is 1.52 times more volatile than Tradegate AG Wertpapierhandelsbank. It trades about 0.01 of its potential returns per unit of risk. Tradegate AG Wertpapierhandelsbank is currently generating about -0.05 per unit of risk. If you would invest 5,217 in Silicon Motion Technology on September 14, 2024 and sell it today you would earn a total of 133.00 from holding Silicon Motion Technology or generate 2.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Silicon Motion Technology vs. Tradegate AG Wertpapierhandels
Performance |
| Timeline |
| Silicon Motion Technology |
| Tradegate AG Wertpap |
Silicon Motion and Tradegate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Silicon Motion and Tradegate
The main advantage of trading using opposite Silicon Motion and Tradegate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silicon Motion position performs unexpectedly, Tradegate 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 Tradegate will offset losses from the drop in Tradegate's long position.| Silicon Motion vs. Sumitomo Rubber Industries | Silicon Motion vs. Martin Marietta Materials | Silicon Motion vs. The Yokohama Rubber | Silicon Motion vs. Materialise NV |
| Tradegate vs. Superior Plus Corp | Tradegate vs. SIVERS SEMICONDUCTORS AB | Tradegate vs. CHINA HUARONG ENERHD 50 | Tradegate vs. NORDIC HALIBUT AS |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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