Correlation Between Diodes Incorporated and QuickLogic

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

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

Diversification Opportunities for Diodes Incorporated and QuickLogic

0.9

Correlation Coefficient

Diodes Incorporated  QuickLogic

Almost no diversification

The 3 months correlation between Diodes and QuickLogic is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Diodes Incorporated and QuickLogic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QuickLogic and Diodes Incorporated 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 Diodes Incorporated are associated (or correlated) with QuickLogic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QuickLogic has no effect on the direction of Diodes Incorporated i.e., Diodes Incorporated and QuickLogic go up and down completely randomly.

Pair Corralation between Diodes Incorporated and QuickLogic

Given the investment horizon of 90 days Diodes Incorporated is expected to generate 0.43 times more return on investment than QuickLogic. However, Diodes Incorporated is 2.35 times less risky than QuickLogic. It trades about -0.19 of its potential returns per unit of risk. QuickLogic is currently generating about -0.12 per unit of risk. If you would invest  6,405  in Diodes Incorporated on December 27, 2024 and sell it today you would lose (1,753) from holding Diodes Incorporated or give up 27.37% of portfolio value over 90 days.

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

Diodes Incorporated  vs.  QuickLogic

Diodes Incorporated

Risk-Adjusted Performance

Very Weak

Over the last 90 days Diodes Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

QuickLogic

Risk-Adjusted Performance

Very Weak

Over the last 90 days QuickLogic has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's forward 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 Diodes Incorporated and QuickLogic

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

The idea behind Diodes Incorporated and QuickLogic 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.