Correlation Between Pixelworks and CEVA

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

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

Diversification Opportunities for Pixelworks and CEVA

0.01

Correlation Coefficient

Pixelworks  CEVA

Significant diversification

The 3 months correlation between Pixelworks and CEVA is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Pixelworks and CEVA Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEVA Inc and Pixelworks 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 Pixelworks are associated (or correlated) with CEVA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEVA Inc has no effect on the direction of Pixelworks i.e., Pixelworks and CEVA go up and down completely randomly.

Pair Corralation between Pixelworks and CEVA

Given the investment horizon of 90 days Pixelworks is expected to under-perform the CEVA. In addition to that, Pixelworks is 1.59 times more volatile than CEVA Inc. It trades about -0.06 of its total potential returns per unit of risk. CEVA Inc is currently generating about 0.1 per unit of volatility. If you would invest  1,953  in CEVA Inc on October 14, 2024 and sell it today you would earn a total of  1,245  from holding CEVA Inc or generate 63.75% return on investment over 90 days.

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

Pixelworks  vs.  CEVA Inc

Pixelworks

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pixelworks 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 essential indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

CEVA Inc

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CEVA Inc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, CEVA sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pixelworks and CEVA

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

The idea behind Pixelworks and CEVA Inc 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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..