Correlation Between Silicon Laboratories and Sequans Communications
Can any of the company-specific risk be diversified away by investing in both Silicon Laboratories and Sequans Communications 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 Sequans Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Silicon Laboratories and Sequans Communications SA, you can compare the effects of market volatilities on Silicon Laboratories and Sequans Communications 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 Sequans Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silicon Laboratories and Sequans Communications.
Diversification Opportunities for Silicon Laboratories and Sequans Communications
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Silicon and Sequans is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Silicon Laboratories and Sequans Communications SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sequans Communications 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 Sequans Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sequans Communications has no effect on the direction of Silicon Laboratories i.e., Silicon Laboratories and Sequans Communications go up and down completely randomly.
Pair Corralation between Silicon Laboratories and Sequans Communications
Given the investment horizon of 90 days Silicon Laboratories is expected to under-perform the Sequans Communications. In addition to that, Silicon Laboratories is 1.89 times more volatile than Sequans Communications SA. It trades about -0.22 of its total potential returns per unit of risk. Sequans Communications SA is currently generating about -0.21 per unit of volatility. If you would invest 223.00 in Sequans Communications SA on January 12, 2025 and sell it today you would lose (31.00) from holding Sequans Communications SA or give up 13.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Silicon Laboratories vs. Sequans Communications SA
Performance |
| Timeline |
| Silicon Laboratories |
| Sequans Communications |
Silicon Laboratories and Sequans Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Silicon Laboratories and Sequans Communications
The main advantage of trading using opposite Silicon Laboratories and Sequans Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silicon Laboratories position performs unexpectedly, Sequans Communications 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 Sequans Communications will offset losses from the drop in Sequans Communications' long position.| Silicon Laboratories vs. Diodes Incorporated | Silicon Laboratories vs. MACOM Technology Solutions | Silicon Laboratories vs. FormFactor | Silicon Laboratories vs. Amkor Technology |
| Sequans Communications vs. QuickLogic | Sequans Communications vs. Power Integrations | Sequans Communications vs. Silicon Laboratories | Sequans Communications vs. FormFactor |
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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