Correlation Between Semtech and Citizens

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Semtech and Citizens 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 Semtech and Citizens into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Semtech and Citizens, you can compare the effects of market volatilities on Semtech and Citizens 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 Semtech with a short position of Citizens. Check out your portfolio center. Please also check ongoing floating volatility patterns of Semtech and Citizens.

Diversification Opportunities for Semtech and Citizens

0.19
  Correlation Coefficient

Average diversification

The 3 months correlation between Semtech and Citizens is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Semtech and Citizens in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens and Semtech 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 Semtech are associated (or correlated) with Citizens. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citizens has no effect on the direction of Semtech i.e., Semtech and Citizens go up and down completely randomly.

Pair Corralation between Semtech and Citizens

Given the investment horizon of 90 days Semtech is expected to generate 1.1 times more return on investment than Citizens. However, Semtech is 1.1 times more volatile than Citizens. It trades about 0.08 of its potential returns per unit of risk. Citizens is currently generating about 0.05 per unit of risk. If you would invest  2,746  in Semtech on September 12, 2024 and sell it today you would earn a total of  3,544  from holding Semtech or generate 129.06% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Semtech  vs.  Citizens

 Performance 
       Timeline  
Semtech 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Semtech are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, Semtech exhibited solid returns over the last few months and may actually be approaching a breakup point.
Citizens 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Citizens are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady forward indicators, Citizens sustained solid returns over the last few months and may actually be approaching a breakup point.

Semtech and Citizens Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Semtech and Citizens

The main advantage of trading using opposite Semtech and Citizens positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Semtech position performs unexpectedly, Citizens 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 Citizens will offset losses from the drop in Citizens' long position.
The idea behind Semtech and Citizens pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.

Other Complementary Tools

Price Transformation
Use Price Transformation models to analyze the depth of different equity instruments across global markets
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing
Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges
Bonds Directory
Find actively traded corporate debentures issued by US companies
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum