Correlation Between Sporttotal and Silicon Motion
Can any of the company-specific risk be diversified away by investing in both Sporttotal and Silicon Motion 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 Sporttotal and Silicon Motion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sporttotal AG and Silicon Motion Technology, you can compare the effects of market volatilities on Sporttotal and Silicon Motion 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 Sporttotal with a short position of Silicon Motion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sporttotal and Silicon Motion.
Diversification Opportunities for Sporttotal and Silicon Motion
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sporttotal and Silicon is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Sporttotal AG and Silicon Motion Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silicon Motion Technology and Sporttotal 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 Sporttotal AG are associated (or correlated) with Silicon Motion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silicon Motion Technology has no effect on the direction of Sporttotal i.e., Sporttotal and Silicon Motion go up and down completely randomly.
Pair Corralation between Sporttotal and Silicon Motion
Assuming the 90 days trading horizon Sporttotal AG is expected to under-perform the Silicon Motion. In addition to that, Sporttotal is 1.53 times more volatile than Silicon Motion Technology. It trades about -0.35 of its total potential returns per unit of risk. Silicon Motion Technology is currently generating about 0.04 per unit of volatility. If you would invest 4,831 in Silicon Motion Technology on September 1, 2024 and sell it today you would earn a total of 89.00 from holding Silicon Motion Technology or generate 1.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sporttotal AG vs. Silicon Motion Technology
Performance |
| Timeline |
| Sporttotal AG |
| Silicon Motion Technology |
Sporttotal and Silicon Motion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sporttotal and Silicon Motion
The main advantage of trading using opposite Sporttotal and Silicon Motion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sporttotal position performs unexpectedly, Silicon Motion 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 Silicon Motion will offset losses from the drop in Silicon Motion's long position.| Sporttotal vs. SIVERS SEMICONDUCTORS AB | Sporttotal vs. Darden Restaurants | Sporttotal vs. Reliance Steel Aluminum | Sporttotal vs. Q2M Managementberatung AG |
| Silicon Motion vs. Norwegian Air Shuttle | Silicon Motion vs. WIZZ AIR HLDGUNSPADR4 | Silicon Motion vs. ELMOS SEMICONDUCTOR | Silicon Motion vs. Enter Air SA |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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