Correlation Between Silergy Corp and Andes Technology

Can any of the company-specific risk be diversified away by investing in both Silergy Corp and Andes Technology 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 Silergy Corp and Andes Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Silergy Corp and Andes Technology Corp, you can compare the effects of market volatilities on Silergy Corp and Andes Technology 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 Silergy Corp with a short position of Andes Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silergy Corp and Andes Technology.

Diversification Opportunities for Silergy Corp and Andes Technology

0.31

Correlation Coefficient

Silergy Corp  Andes Technology

Weak diversification

The 3 months correlation between Silergy and Andes is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Silergy Corp and Andes Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Andes Technology Corp and Silergy Corp 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 Silergy Corp are associated (or correlated) with Andes Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Andes Technology Corp has no effect on the direction of Silergy Corp i.e., Silergy Corp and Andes Technology go up and down completely randomly.

Pair Corralation between Silergy Corp and Andes Technology

Assuming the 90 days trading horizon Silergy Corp is expected to under-perform the Andes Technology. In addition to that, Silergy Corp is 1.15 times more volatile than Andes Technology Corp. It trades about -0.17 of its total potential returns per unit of risk. Andes Technology Corp is currently generating about -0.05 per unit of volatility. If you would invest  40,450  in Andes Technology Corp on October 20, 2024 and sell it today you would lose (3,650) from holding Andes Technology Corp or give up 9.02% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Silergy Corp  vs.  Andes Technology Corp

Silergy Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Silergy Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Andes Technology Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Andes Technology Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Silergy Corp and Andes Technology

The main advantage of trading using opposite Silergy Corp and Andes Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silergy Corp position performs unexpectedly, Andes Technology 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 Andes Technology will offset losses from the drop in Andes Technology's long position.

The idea behind Silergy Corp and Andes Technology Corp 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.