Correlation Between SGH Old and Semtech
Can any of the company-specific risk be diversified away by investing in both SGH Old and Semtech 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 Semtech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SGH Old and Semtech, you can compare the effects of market volatilities on SGH Old and Semtech 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 Semtech. Check out your portfolio center. Please also check ongoing floating volatility patterns of SGH Old and Semtech.
Diversification Opportunities for SGH Old and Semtech
Pay attention - limited upside
The 3 months correlation between SGH and Semtech is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SGH Old and Semtech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semtech 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 Semtech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semtech has no effect on the direction of SGH Old i.e., SGH Old and Semtech go up and down completely randomly.
Pair Corralation between SGH Old and Semtech
Considering the 90-day investment horizon SGH Old is expected to generate 9.76 times less return on investment than Semtech. But when comparing it to its historical volatility, SGH Old is 1.13 times less risky than Semtech. It trades about 0.02 of its potential returns per unit of risk. Semtech is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,983 in Semtech on November 3, 2024 and sell it today you would earn a total of 4,713 from holding Semtech or generate 237.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 70.56% |
| Values | Daily Returns |
SGH Old vs. Semtech
Performance |
| Timeline |
| SGH Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Semtech |
SGH Old and Semtech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SGH Old and Semtech
The main advantage of trading using opposite SGH Old and Semtech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SGH Old position performs unexpectedly, Semtech 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 Semtech will offset losses from the drop in Semtech's long position.| SGH Old vs. Silicon Motion Technology | SGH Old vs. MACOM Technology Solutions | SGH Old vs. Semtech | SGH Old vs. Alpha and Omega |
| Semtech vs. Power Integrations | Semtech vs. Diodes Incorporated | Semtech vs. MACOM Technology Solutions | Semtech vs. Cirrus Logic |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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