Correlation Between Analog Devices and Everspin Technologies

Can any of the company-specific risk be diversified away by investing in both Analog Devices and Everspin Technologies 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 Analog Devices and Everspin Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Analog Devices and Everspin Technologies

0.17

Correlation Coefficient

Analog Devices  Everspin Technologies

Average diversification

The 3 months correlation between Analog and Everspin is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Analog Devices and Everspin Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Everspin Technologies and Analog Devices 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 Analog Devices are associated (or correlated) with Everspin Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Everspin Technologies has no effect on the direction of Analog Devices i.e., Analog Devices and Everspin Technologies go up and down completely randomly.

Pair Corralation between Analog Devices and Everspin Technologies

Considering the 90-day investment horizon Analog Devices is expected to generate 0.68 times more return on investment than Everspin Technologies. However, Analog Devices is 1.46 times less risky than Everspin Technologies. It trades about 0.04 of its potential returns per unit of risk. Everspin Technologies is currently generating about 0.01 per unit of risk. If you would invest  16,366  in Analog Devices on October 14, 2024 and sell it today you would earn a total of  4,871  from holding Analog Devices or generate 29.76% return on investment over 90 days.

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

Analog Devices  vs.  Everspin Technologies

Analog Devices

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Analog Devices has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Everspin Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Everspin Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Everspin Technologies is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Analog Devices and Everspin Technologies

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

The idea behind Analog Devices and Everspin Technologies 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.

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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..