Correlation Between Silicon Motion and CEVA
Can any of the company-specific risk be diversified away by investing in both Silicon Motion and CEVA 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 CEVA 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 CEVA Inc, you can compare the effects of market volatilities on Silicon Motion and CEVA 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 CEVA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silicon Motion and CEVA.
Diversification Opportunities for Silicon Motion and CEVA
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Silicon and CEVA is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Silicon Motion Technology and CEVA Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEVA Inc 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 CEVA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEVA Inc has no effect on the direction of Silicon Motion i.e., Silicon Motion and CEVA go up and down completely randomly.
Pair Corralation between Silicon Motion and CEVA
Given the investment horizon of 90 days Silicon Motion is expected to generate 129.15 times less return on investment than CEVA. But when comparing it to its historical volatility, Silicon Motion Technology is 1.55 times less risky than CEVA. It trades about 0.0 of its potential returns per unit of risk. CEVA Inc is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 2,437 in CEVA Inc on August 27, 2024 and sell it today you would earn a total of 590.00 from holding CEVA Inc or generate 24.21% 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. CEVA Inc
Performance |
| Timeline |
| Silicon Motion Technology |
| CEVA Inc |
Silicon Motion and CEVA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Silicon Motion and CEVA
The main advantage of trading using opposite Silicon Motion and CEVA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silicon Motion position performs unexpectedly, CEVA 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 CEVA will offset losses from the drop in CEVA's long position.| Silicon Motion vs. ASE Industrial Holding | Silicon Motion vs. United Microelectronics | Silicon Motion vs. ChipMOS Technologies | Silicon Motion vs. SemiLEDS |
| CEVA vs. MagnaChip Semiconductor | CEVA vs. MACOM Technology Solutions | CEVA vs. FormFactor | CEVA vs. MaxLinear |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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