Correlation Between FIFTH and Semtech
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By analyzing existing cross correlation between FIFTH THIRD BANCORP and Semtech, you can compare the effects of market volatilities on FIFTH and Semtech 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 FIFTH with a short position of Semtech. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIFTH and Semtech.
Diversification Opportunities for FIFTH and Semtech
Excellent diversification
The 3 months correlation between FIFTH and Semtech is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding FIFTH THIRD BANCORP and Semtech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semtech and FIFTH 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 FIFTH THIRD BANCORP are associated (or correlated) with Semtech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semtech has no effect on the direction of FIFTH i.e., FIFTH and Semtech go up and down completely randomly.
Pair Corralation between FIFTH and Semtech
Assuming the 90 days trading horizon FIFTH is expected to generate 1775.5 times less return on investment than Semtech. But when comparing it to its historical volatility, FIFTH THIRD BANCORP is 3.59 times less risky than Semtech. It trades about 0.0 of its potential returns per unit of risk. Semtech is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,282 in Semtech on September 3, 2024 and sell it today you would earn a total of 4,122 from holding Semtech or generate 180.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.19% |
| Values | Daily Returns |
FIFTH THIRD BANCORP vs. Semtech
Performance |
| Timeline |
| FIFTH THIRD BANCORP |
| Semtech |
FIFTH and Semtech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FIFTH and Semtech
The main advantage of trading using opposite FIFTH and Semtech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIFTH position performs unexpectedly, Semtech 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 Semtech will offset losses from the drop in Semtech's long position.The idea behind FIFTH THIRD BANCORP and Semtech 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.| Semtech vs. Power Integrations | Semtech vs. Diodes Incorporated | Semtech vs. MACOM Technology Solutions | Semtech vs. Cirrus Logic |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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