Correlation Between Semtech and Unum
Can any of the company-specific risk be diversified away by investing in both Semtech and Unum 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 Unum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Semtech and Unum Group, you can compare the effects of market volatilities on Semtech and Unum 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 Unum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Semtech and Unum.
Diversification Opportunities for Semtech and Unum
Good diversification
The 3 months correlation between Semtech and Unum is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Semtech and Unum Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unum Group 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 Unum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unum Group has no effect on the direction of Semtech i.e., Semtech and Unum go up and down completely randomly.
Pair Corralation between Semtech and Unum
Given the investment horizon of 90 days Semtech is expected to generate 6.01 times more return on investment than Unum. However, Semtech is 6.01 times more volatile than Unum Group. It trades about 0.07 of its potential returns per unit of risk. Unum Group is currently generating about 0.07 per unit of risk. If you would invest 2,561 in Semtech on August 28, 2024 and sell it today you would earn a total of 2,783 from holding Semtech or generate 108.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Semtech vs. Unum Group
Performance |
| Timeline |
| Semtech |
| Unum Group |
Semtech and Unum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Semtech and Unum
The main advantage of trading using opposite Semtech and Unum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Semtech position performs unexpectedly, Unum 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 Unum will offset losses from the drop in Unum's long position.| Semtech vs. Power Integrations | Semtech vs. Diodes Incorporated | Semtech vs. MACOM Technology Solutions | Semtech vs. Cirrus Logic |
| Unum vs. Nextplat Corp | Unum vs. Xponential Fitness | Unum vs. Universal Display | Unum vs. Sphere Entertainment Co |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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