Correlation Between Maxeon Solar and Navitas Semiconductor

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

By analyzing existing cross correlation between Maxeon Solar Technologies and Navitas Semiconductor Corp, you can compare the effects of market volatilities on Maxeon Solar and Navitas Semiconductor 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 Maxeon Solar with a short position of Navitas Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maxeon Solar and Navitas Semiconductor.

Diversification Opportunities for Maxeon Solar and Navitas Semiconductor

-0.47

Correlation Coefficient

Maxeon Solar  Navitas Semiconductor

Very good diversification

The 3 months correlation between Maxeon and Navitas is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Maxeon Solar Technologies and Navitas Semiconductor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Navitas Semiconductor and Maxeon Solar 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 Maxeon Solar Technologies are associated (or correlated) with Navitas Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Navitas Semiconductor has no effect on the direction of Maxeon Solar i.e., Maxeon Solar and Navitas Semiconductor go up and down completely randomly.

Pair Corralation between Maxeon Solar and Navitas Semiconductor

Given the investment horizon of 90 days Maxeon Solar Technologies is expected to under-perform the Navitas Semiconductor. In addition to that, Maxeon Solar is 1.95 times more volatile than Navitas Semiconductor Corp. It trades about -0.07 of its total potential returns per unit of risk. Navitas Semiconductor Corp is currently generating about 0.01 per unit of volatility. If you would invest  361.00  in Navitas Semiconductor Corp on September 21, 2024 and sell it today you would lose (80.00) from holding Navitas Semiconductor Corp or give up 22.16% of portfolio value over 90 days.

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

Maxeon Solar Technologies  vs.  Navitas Semiconductor Corp

Maxeon Solar Technologies

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Maxeon Solar Technologies are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Maxeon Solar displayed solid returns over the last few months and may actually be approaching a breakup point.

Navitas Semiconductor

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Navitas Semiconductor Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Navitas Semiconductor unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Maxeon Solar and Navitas Semiconductor

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

The idea behind Maxeon Solar Technologies and Navitas Semiconductor Corp 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.