Correlation Between Silicon Laboratories and Navitas Semiconductor
Can any of the company-specific risk be diversified away by investing in both Silicon Laboratories and Navitas Semiconductor 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 Laboratories and Navitas Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Silicon Laboratories and Navitas Semiconductor Corp, you can compare the effects of market volatilities on Silicon Laboratories and Navitas Semiconductor 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 Laboratories with a short position of Navitas Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silicon Laboratories and Navitas Semiconductor.
Diversification Opportunities for Silicon Laboratories and Navitas Semiconductor
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Silicon and Navitas is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Silicon Laboratories and Navitas Semiconductor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Navitas Semiconductor and Silicon Laboratories 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 Laboratories are associated (or correlated) with Navitas Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Navitas Semiconductor has no effect on the direction of Silicon Laboratories i.e., Silicon Laboratories and Navitas Semiconductor go up and down completely randomly.
Pair Corralation between Silicon Laboratories and Navitas Semiconductor
Given the investment horizon of 90 days Silicon Laboratories is expected to generate 0.28 times more return on investment than Navitas Semiconductor. However, Silicon Laboratories is 3.52 times less risky than Navitas Semiconductor. It trades about 0.17 of its potential returns per unit of risk. Navitas Semiconductor Corp is currently generating about -0.08 per unit of risk. If you would invest 12,422 in Silicon Laboratories on November 1, 2024 and sell it today you would earn a total of 910.00 from holding Silicon Laboratories or generate 7.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Silicon Laboratories vs. Navitas Semiconductor Corp
Performance |
| Timeline |
| Silicon Laboratories |
| Navitas Semiconductor |
Silicon Laboratories and Navitas Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Silicon Laboratories and Navitas Semiconductor
The main advantage of trading using opposite Silicon Laboratories and Navitas Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silicon Laboratories position performs unexpectedly, Navitas Semiconductor 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 Navitas Semiconductor will offset losses from the drop in Navitas Semiconductor's long position.| Silicon Laboratories vs. Diodes Incorporated | Silicon Laboratories vs. MACOM Technology Solutions | Silicon Laboratories vs. FormFactor | Silicon Laboratories vs. Amkor Technology |
| Navitas Semiconductor vs. ON Semiconductor | Navitas Semiconductor vs. Monolithic Power Systems | Navitas Semiconductor vs. Globalfoundries | Navitas Semiconductor vs. Analog Devices |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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