Correlation Between SEALSQ Corp and Monolithic Power

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

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

Diversification Opportunities for SEALSQ Corp and Monolithic Power

0.18

Correlation Coefficient

SEALSQ Corp  Monolithic Power

Average diversification

The 3 months correlation between SEALSQ and Monolithic is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding SEALSQ Corp and Monolithic Power Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monolithic Power Systems and SEALSQ Corp 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 SEALSQ Corp are associated (or correlated) with Monolithic Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monolithic Power Systems has no effect on the direction of SEALSQ Corp i.e., SEALSQ Corp and Monolithic Power go up and down completely randomly.

Pair Corralation between SEALSQ Corp and Monolithic Power

Given the investment horizon of 90 days SEALSQ Corp is expected to under-perform the Monolithic Power. In addition to that, SEALSQ Corp is 2.48 times more volatile than Monolithic Power Systems. It trades about -0.24 of its total potential returns per unit of risk. Monolithic Power Systems is currently generating about -0.25 per unit of volatility. If you would invest  70,536  in Monolithic Power Systems on December 10, 2024 and sell it today you would lose (12,377) from holding Monolithic Power Systems or give up 17.55% of portfolio value over 90 days.

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

SEALSQ Corp  vs.  Monolithic Power Systems

SEALSQ Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SEALSQ Corp are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, SEALSQ Corp unveiled solid returns over the last few months and may actually be approaching a breakup point.

Monolithic Power Systems

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Monolithic Power Systems are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Monolithic Power is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with SEALSQ Corp and Monolithic Power

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

The idea behind SEALSQ Corp and Monolithic Power Systems 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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.