Correlation Between Silicon Motion and XTANT MEDICAL
Can any of the company-specific risk be diversified away by investing in both Silicon Motion and XTANT MEDICAL 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 XTANT MEDICAL 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 XTANT MEDICAL HLDGS, you can compare the effects of market volatilities on Silicon Motion and XTANT MEDICAL 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 XTANT MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silicon Motion and XTANT MEDICAL.
Diversification Opportunities for Silicon Motion and XTANT MEDICAL
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Silicon and XTANT is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Silicon Motion Technology and XTANT MEDICAL HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XTANT MEDICAL HLDGS 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 XTANT MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XTANT MEDICAL HLDGS has no effect on the direction of Silicon Motion i.e., Silicon Motion and XTANT MEDICAL go up and down completely randomly.
Pair Corralation between Silicon Motion and XTANT MEDICAL
Assuming the 90 days trading horizon Silicon Motion Technology is expected to generate 1.55 times more return on investment than XTANT MEDICAL. However, Silicon Motion is 1.55 times more volatile than XTANT MEDICAL HLDGS. It trades about -0.03 of its potential returns per unit of risk. XTANT MEDICAL HLDGS is currently generating about -0.13 per unit of risk. If you would invest 5,250 in Silicon Motion Technology on September 24, 2024 and sell it today you would lose (150.00) from holding Silicon Motion Technology or give up 2.86% 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. XTANT MEDICAL HLDGS
Performance |
| Timeline |
| Silicon Motion Technology |
| XTANT MEDICAL HLDGS |
Silicon Motion and XTANT MEDICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Silicon Motion and XTANT MEDICAL
The main advantage of trading using opposite Silicon Motion and XTANT MEDICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silicon Motion position performs unexpectedly, XTANT MEDICAL 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 XTANT MEDICAL will offset losses from the drop in XTANT MEDICAL's long position.| Silicon Motion vs. REGAL ASIAN INVESTMENTS | Silicon Motion vs. ECHO INVESTMENT ZY | Silicon Motion vs. Japan Asia Investment | Silicon Motion vs. Apollo Investment Corp |
| XTANT MEDICAL vs. SHIN ETSU CHEMICAL | XTANT MEDICAL vs. SEKISUI CHEMICAL | XTANT MEDICAL vs. Soken Chemical Engineering | XTANT MEDICAL vs. Silicon Motion Technology |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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