Correlation Between Silicon Motion and Sporttotal
Can any of the company-specific risk be diversified away by investing in both Silicon Motion and Sporttotal 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 Sporttotal 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 Sporttotal AG, you can compare the effects of market volatilities on Silicon Motion and Sporttotal 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 Sporttotal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silicon Motion and Sporttotal.
Diversification Opportunities for Silicon Motion and Sporttotal
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Silicon and Sporttotal is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Silicon Motion Technology and Sporttotal AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sporttotal 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 Sporttotal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sporttotal AG has no effect on the direction of Silicon Motion i.e., Silicon Motion and Sporttotal go up and down completely randomly.
Pair Corralation between Silicon Motion and Sporttotal
Assuming the 90 days trading horizon Silicon Motion Technology is expected to generate 0.66 times more return on investment than Sporttotal. However, Silicon Motion Technology is 1.53 times less risky than Sporttotal. It trades about 0.04 of its potential returns per unit of risk. Sporttotal AG is currently generating about -0.35 per unit of risk. If you would invest 4,831 in Silicon Motion Technology on September 1, 2024 and sell it today you would earn a total of 89.00 from holding Silicon Motion Technology or generate 1.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Silicon Motion Technology vs. Sporttotal AG
Performance |
| Timeline |
| Silicon Motion Technology |
| Sporttotal AG |
Silicon Motion and Sporttotal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Silicon Motion and Sporttotal
The main advantage of trading using opposite Silicon Motion and Sporttotal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silicon Motion position performs unexpectedly, Sporttotal 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 Sporttotal will offset losses from the drop in Sporttotal's long position.| Silicon Motion vs. Norwegian Air Shuttle | Silicon Motion vs. WIZZ AIR HLDGUNSPADR4 | Silicon Motion vs. ELMOS SEMICONDUCTOR | Silicon Motion vs. Enter Air SA |
| Sporttotal vs. SIVERS SEMICONDUCTORS AB | Sporttotal vs. Darden Restaurants | Sporttotal vs. Reliance Steel Aluminum | Sporttotal vs. Q2M Managementberatung AG |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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