Correlation Between SGH Old and Silicon Laboratories
Can any of the company-specific risk be diversified away by investing in both SGH Old and Silicon Laboratories 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 SGH Old and Silicon Laboratories into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SGH Old and Silicon Laboratories, you can compare the effects of market volatilities on SGH Old and Silicon Laboratories 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 SGH Old with a short position of Silicon Laboratories. Check out your portfolio center. Please also check ongoing floating volatility patterns of SGH Old and Silicon Laboratories.
Diversification Opportunities for SGH Old and Silicon Laboratories
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between SGH and Silicon is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding SGH Old and Silicon Laboratories in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silicon Laboratories and SGH Old 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 SGH Old are associated (or correlated) with Silicon Laboratories. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silicon Laboratories has no effect on the direction of SGH Old i.e., SGH Old and Silicon Laboratories go up and down completely randomly.
Pair Corralation between SGH Old and Silicon Laboratories
If you would invest 12,500 in Silicon Laboratories on October 21, 2024 and sell it today you would earn a total of 975.00 from holding Silicon Laboratories or generate 7.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 5.26% |
| Values | Daily Returns |
SGH Old vs. Silicon Laboratories
Performance |
| Timeline |
| SGH Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Silicon Laboratories |
SGH Old and Silicon Laboratories Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SGH Old and Silicon Laboratories
The main advantage of trading using opposite SGH Old and Silicon Laboratories positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SGH Old position performs unexpectedly, Silicon Laboratories 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 Silicon Laboratories will offset losses from the drop in Silicon Laboratories' long position.| SGH Old vs. Silicon Motion Technology | SGH Old vs. MACOM Technology Solutions | SGH Old vs. Semtech | SGH Old vs. Alpha and Omega |
| Silicon Laboratories vs. Diodes Incorporated | Silicon Laboratories vs. MACOM Technology Solutions | Silicon Laboratories vs. FormFactor | Silicon Laboratories vs. Amkor 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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