Correlation Between Silicon Motion and ChipMOS Technologies
Can any of the company-specific risk be diversified away by investing in both Silicon Motion and ChipMOS Technologies 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 ChipMOS Technologies 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 ChipMOS Technologies, you can compare the effects of market volatilities on Silicon Motion and ChipMOS Technologies 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 ChipMOS Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silicon Motion and ChipMOS Technologies.
Diversification Opportunities for Silicon Motion and ChipMOS Technologies
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Silicon and ChipMOS is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Silicon Motion Technology and ChipMOS Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ChipMOS Technologies 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 ChipMOS Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ChipMOS Technologies has no effect on the direction of Silicon Motion i.e., Silicon Motion and ChipMOS Technologies go up and down completely randomly.
Pair Corralation between Silicon Motion and ChipMOS Technologies
Given the investment horizon of 90 days Silicon Motion is expected to generate 16.16 times less return on investment than ChipMOS Technologies. But when comparing it to its historical volatility, Silicon Motion Technology is 1.4 times less risky than ChipMOS Technologies. It trades about 0.01 of its potential returns per unit of risk. ChipMOS Technologies is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,882 in ChipMOS Technologies on November 3, 2024 and sell it today you would earn a total of 104.00 from holding ChipMOS Technologies or generate 5.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Silicon Motion Technology vs. ChipMOS Technologies
Performance |
| Timeline |
| Silicon Motion Technology |
| ChipMOS Technologies |
Silicon Motion and ChipMOS Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Silicon Motion and ChipMOS Technologies
The main advantage of trading using opposite Silicon Motion and ChipMOS Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silicon Motion position performs unexpectedly, ChipMOS Technologies 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 ChipMOS Technologies will offset losses from the drop in ChipMOS Technologies' long position.| Silicon Motion vs. ASE Industrial Holding | Silicon Motion vs. United Microelectronics | Silicon Motion vs. ChipMOS Technologies | Silicon Motion vs. SemiLEDS |
| ChipMOS Technologies vs. Nano Labs | ChipMOS Technologies vs. Wisekey International Holding | ChipMOS Technologies vs. Silicon Motion Technology | ChipMOS Technologies vs. United Microelectronics |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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