Correlation Between Silicon Motion and BTC Digital
Can any of the company-specific risk be diversified away by investing in both Silicon Motion and BTC Digital 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 BTC Digital 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 BTC Digital, you can compare the effects of market volatilities on Silicon Motion and BTC Digital 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 BTC Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silicon Motion and BTC Digital.
Diversification Opportunities for Silicon Motion and BTC Digital
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Silicon and BTC is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Silicon Motion Technology and BTC Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BTC Digital 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 BTC Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BTC Digital has no effect on the direction of Silicon Motion i.e., Silicon Motion and BTC Digital go up and down completely randomly.
Pair Corralation between Silicon Motion and BTC Digital
Given the investment horizon of 90 days Silicon Motion is expected to generate 2326.13 times less return on investment than BTC Digital. But when comparing it to its historical volatility, Silicon Motion Technology is 25.05 times less risky than BTC Digital. It trades about 0.0 of its potential returns per unit of risk. BTC Digital is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 182.00 in BTC Digital on August 28, 2024 and sell it today you would earn a total of 1,350 from holding BTC Digital or generate 741.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Silicon Motion Technology vs. BTC Digital
Performance |
| Timeline |
| Silicon Motion Technology |
| BTC Digital |
Silicon Motion and BTC Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Silicon Motion and BTC Digital
The main advantage of trading using opposite Silicon Motion and BTC Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silicon Motion position performs unexpectedly, BTC Digital 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 BTC Digital will offset losses from the drop in BTC Digital's long position.| Silicon Motion vs. ASE Industrial Holding | Silicon Motion vs. United Microelectronics | Silicon Motion vs. ChipMOS Technologies | Silicon Motion vs. SemiLEDS |
| BTC Digital vs. WT Offshore | BTC Digital vs. Avient Corp | BTC Digital vs. U Power Limited | BTC Digital vs. Thor Industries |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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