Correlation Between Silicon Motion and Thyssenkrupp
Can any of the company-specific risk be diversified away by investing in both Silicon Motion and Thyssenkrupp 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 Thyssenkrupp 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 thyssenkrupp AG, you can compare the effects of market volatilities on Silicon Motion and Thyssenkrupp 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 Thyssenkrupp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silicon Motion and Thyssenkrupp.
Diversification Opportunities for Silicon Motion and Thyssenkrupp
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Silicon and Thyssenkrupp is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Silicon Motion Technology and thyssenkrupp AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on thyssenkrupp AG 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 Thyssenkrupp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of thyssenkrupp AG has no effect on the direction of Silicon Motion i.e., Silicon Motion and Thyssenkrupp go up and down completely randomly.
Pair Corralation between Silicon Motion and Thyssenkrupp
Assuming the 90 days trading horizon Silicon Motion Technology is expected to generate 0.9 times more return on investment than Thyssenkrupp. However, Silicon Motion Technology is 1.12 times less risky than Thyssenkrupp. It trades about 0.01 of its potential returns per unit of risk. thyssenkrupp AG is currently generating about -0.01 per unit of risk. If you would invest 5,551 in Silicon Motion Technology on September 14, 2024 and sell it today you would lose (201.00) from holding Silicon Motion Technology or give up 3.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Silicon Motion Technology vs. thyssenkrupp AG
Performance |
| Timeline |
| Silicon Motion Technology |
| thyssenkrupp AG |
Silicon Motion and Thyssenkrupp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Silicon Motion and Thyssenkrupp
The main advantage of trading using opposite Silicon Motion and Thyssenkrupp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silicon Motion position performs unexpectedly, Thyssenkrupp 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 Thyssenkrupp will offset losses from the drop in Thyssenkrupp'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 |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |