Correlation Between Wolfspeed and Navitas Semiconductor
Can any of the company-specific risk be diversified away by investing in both Wolfspeed and Navitas Semiconductor 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 Wolfspeed and Navitas Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wolfspeed and Navitas Semiconductor Corp, you can compare the effects of market volatilities on Wolfspeed and Navitas Semiconductor 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 Wolfspeed with a short position of Navitas Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wolfspeed and Navitas Semiconductor.
Diversification Opportunities for Wolfspeed and Navitas Semiconductor
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Wolfspeed and Navitas is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Wolfspeed and Navitas Semiconductor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Navitas Semiconductor and Wolfspeed 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 Wolfspeed are associated (or correlated) with Navitas Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Navitas Semiconductor has no effect on the direction of Wolfspeed i.e., Wolfspeed and Navitas Semiconductor go up and down completely randomly.
Pair Corralation between Wolfspeed and Navitas Semiconductor
Given the investment horizon of 90 days Wolfspeed is expected to generate 1.25 times more return on investment than Navitas Semiconductor. However, Wolfspeed is 1.25 times more volatile than Navitas Semiconductor Corp. It trades about 0.01 of its potential returns per unit of risk. Navitas Semiconductor Corp is currently generating about -0.06 per unit of risk. If you would invest 628.00 in Wolfspeed on November 18, 2024 and sell it today you would lose (10.00) from holding Wolfspeed or give up 1.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wolfspeed vs. Navitas Semiconductor Corp
Performance |
| Timeline |
| Wolfspeed |
| Navitas Semiconductor |
Wolfspeed and Navitas Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wolfspeed and Navitas Semiconductor
The main advantage of trading using opposite Wolfspeed and Navitas Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wolfspeed position performs unexpectedly, Navitas Semiconductor 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 Navitas Semiconductor will offset losses from the drop in Navitas Semiconductor's long position.| Wolfspeed vs. NXP Semiconductors NV | Wolfspeed vs. Analog Devices | Wolfspeed vs. Microchip Technology | Wolfspeed vs. Monolithic Power Systems |
| Navitas Semiconductor vs. ON Semiconductor | Navitas Semiconductor vs. Monolithic Power Systems | Navitas Semiconductor vs. Globalfoundries | Navitas Semiconductor vs. Analog Devices |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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