Correlation Between CEVA and Sitime

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

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

Diversification Opportunities for CEVA and Sitime

0.19

Correlation Coefficient

CEVA  Sitime

Average diversification

The 3 months correlation between CEVA and Sitime is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding CEVA Inc and Sitime in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sitime and CEVA 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 CEVA Inc are associated (or correlated) with Sitime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sitime has no effect on the direction of CEVA i.e., CEVA and Sitime go up and down completely randomly.

Pair Corralation between CEVA and Sitime

Given the investment horizon of 90 days CEVA Inc is expected to generate 0.67 times more return on investment than Sitime. However, CEVA Inc is 1.5 times less risky than Sitime. It trades about -0.05 of its potential returns per unit of risk. Sitime is currently generating about -0.03 per unit of risk. If you would invest  3,204  in CEVA Inc on December 28, 2024 and sell it today you would lose (503.00) from holding CEVA Inc or give up 15.7% of portfolio value over 90 days.

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

CEVA Inc  vs.  Sitime

CEVA Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days CEVA Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Sitime

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sitime has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with CEVA and Sitime

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

The idea behind CEVA Inc and Sitime 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.