Correlation Between Amylyx Pharmaceuticals and Silicom

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

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

Diversification Opportunities for Amylyx Pharmaceuticals and Silicom

-0.69

Correlation Coefficient

Amylyx Pharmaceuticals  Silicom

Excellent diversification

The 3 months correlation between Amylyx and Silicom is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Amylyx Pharmaceuticals and Silicom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silicom and Amylyx Pharmaceuticals 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 Amylyx Pharmaceuticals are associated (or correlated) with Silicom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silicom has no effect on the direction of Amylyx Pharmaceuticals i.e., Amylyx Pharmaceuticals and Silicom go up and down completely randomly.

Pair Corralation between Amylyx Pharmaceuticals and Silicom

Given the investment horizon of 90 days Amylyx Pharmaceuticals is expected to under-perform the Silicom. In addition to that, Amylyx Pharmaceuticals is 1.39 times more volatile than Silicom. It trades about -0.06 of its total potential returns per unit of risk. Silicom is currently generating about 0.11 per unit of volatility. If you would invest  1,378  in Silicom on October 20, 2024 and sell it today you would earn a total of  311.00  from holding Silicom or generate 22.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Amylyx Pharmaceuticals  vs.  Silicom

Amylyx Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amylyx Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Etf's essential indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the ETF investors.

Silicom

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Silicom are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak essential indicators, Silicom exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Amylyx Pharmaceuticals and Silicom

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

The idea behind Amylyx Pharmaceuticals and Silicom 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.