Correlation Between Sitime and CEVA
Can any of the company-specific risk be diversified away by investing in both Sitime 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 Sitime and CEVA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sitime and CEVA Inc, you can compare the effects of market volatilities on Sitime 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 Sitime with a short position of CEVA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sitime and CEVA.
Diversification Opportunities for Sitime and CEVA
Very poor diversification
The 3 months correlation between Sitime and CEVA is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Sitime and CEVA Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEVA Inc and Sitime 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 Sitime 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 Sitime i.e., Sitime and CEVA go up and down completely randomly.
Pair Corralation between Sitime and CEVA
Given the investment horizon of 90 days Sitime is expected to generate 1.11 times less return on investment than CEVA. In addition to that, Sitime is 1.26 times more volatile than CEVA Inc. It trades about 0.16 of its total potential returns per unit of risk. CEVA Inc is currently generating about 0.22 per unit of volatility. If you would invest 2,384 in CEVA Inc on August 24, 2024 and sell it today you would earn a total of 483.00 from holding CEVA Inc or generate 20.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sitime vs. CEVA Inc
Performance |
| Timeline |
| Sitime |
| CEVA Inc |
Sitime and CEVA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sitime and CEVA
The main advantage of trading using opposite Sitime and CEVA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sitime 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.| Sitime vs. Lattice Semiconductor | Sitime vs. Qorvo Inc | Sitime vs. Microchip Technology | Sitime vs. Silicon Laboratories |
| 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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