Correlation Between Netlist and Lattice Semiconductor

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

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

Diversification Opportunities for Netlist and Lattice Semiconductor

-0.58

Correlation Coefficient

Netlist  Lattice Semiconductor

Excellent diversification

The 3 months correlation between Netlist and Lattice is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Netlist and Lattice Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lattice Semiconductor and Netlist 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 Netlist are associated (or correlated) with Lattice Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lattice Semiconductor has no effect on the direction of Netlist i.e., Netlist and Lattice Semiconductor go up and down completely randomly.

Pair Corralation between Netlist and Lattice Semiconductor

If you would invest  5,455  in Lattice Semiconductor on September 26, 2024 and sell it today you would earn a total of  634.00  from holding Lattice Semiconductor or generate 11.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	2.44%
Values	Daily Returns

Netlist  vs.  Lattice Semiconductor

Netlist

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Netlist has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Netlist is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Lattice Semiconductor

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Lattice Semiconductor are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Lattice Semiconductor may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Netlist and Lattice Semiconductor

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

The idea behind Netlist and Lattice Semiconductor 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.