Correlation Between POET Technologies and Silicon Laboratories

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

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

Diversification Opportunities for POET Technologies and Silicon Laboratories

0.0

Correlation Coefficient

POET Technologies  Silicon Laboratories

Pay attention - limited upside

The 3 months correlation between POET and Silicon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding POET Technologies and Silicon Laboratories in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silicon Laboratories and POET Technologies 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 POET Technologies are associated (or correlated) with Silicon Laboratories. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silicon Laboratories has no effect on the direction of POET Technologies i.e., POET Technologies and Silicon Laboratories go up and down completely randomly.

Pair Corralation between POET Technologies and Silicon Laboratories

Given the investment horizon of 90 days POET Technologies is expected to under-perform the Silicon Laboratories. In addition to that, POET Technologies is 2.17 times more volatile than Silicon Laboratories. It trades about -0.1 of its total potential returns per unit of risk. Silicon Laboratories is currently generating about -0.01 per unit of volatility. If you would invest  12,486  in Silicon Laboratories on December 28, 2024 and sell it today you would lose (529.00) from holding Silicon Laboratories or give up 4.24% of portfolio value over 90 days.

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

POET Technologies  vs.  Silicon Laboratories

POET Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days POET Technologies 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 technical and fundamental indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Silicon Laboratories

Risk-Adjusted Performance

Very Weak

Over the last 90 days Silicon Laboratories has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Silicon Laboratories is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with POET Technologies and Silicon Laboratories

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

The idea behind POET Technologies and Silicon Laboratories 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.

Check out your portfolio center.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.