Correlation Between Cirrus Logic and MaxLinear

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

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

Diversification Opportunities for Cirrus Logic and MaxLinear

-0.22

Correlation Coefficient

Cirrus Logic  MaxLinear

Very good diversification

The 3 months correlation between Cirrus and MaxLinear is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Cirrus Logic and MaxLinear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MaxLinear and Cirrus Logic 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 Cirrus Logic are associated (or correlated) with MaxLinear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MaxLinear has no effect on the direction of Cirrus Logic i.e., Cirrus Logic and MaxLinear go up and down completely randomly.

Pair Corralation between Cirrus Logic and MaxLinear

Given the investment horizon of 90 days Cirrus Logic is expected to generate 0.42 times more return on investment than MaxLinear. However, Cirrus Logic is 2.37 times less risky than MaxLinear. It trades about 0.03 of its potential returns per unit of risk. MaxLinear is currently generating about -0.15 per unit of risk. If you would invest  10,019  in Cirrus Logic on December 29, 2024 and sell it today you would earn a total of  307.00  from holding Cirrus Logic or generate 3.06% return on investment over 90 days.

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

Cirrus Logic  vs.  MaxLinear

Cirrus Logic

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cirrus Logic are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Cirrus Logic is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

MaxLinear

Risk-Adjusted Performance

Very Weak

Over the last 90 days MaxLinear has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Cirrus Logic and MaxLinear

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

The idea behind Cirrus Logic and MaxLinear 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..