Correlation Between QuickLogic and Power Integrations

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

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

Diversification Opportunities for QuickLogic and Power Integrations

0.32

Correlation Coefficient

QuickLogic  Power Integrations

Weak diversification

The 3 months correlation between QuickLogic and Power is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding QuickLogic and Power Integrations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Integrations and QuickLogic 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 QuickLogic are associated (or correlated) with Power Integrations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Integrations has no effect on the direction of QuickLogic i.e., QuickLogic and Power Integrations go up and down completely randomly.

Pair Corralation between QuickLogic and Power Integrations

Given the investment horizon of 90 days QuickLogic is expected to generate 1.23 times more return on investment than Power Integrations. However, QuickLogic is 1.23 times more volatile than Power Integrations. It trades about 0.07 of its potential returns per unit of risk. Power Integrations is currently generating about -0.04 per unit of risk. If you would invest  753.00  in QuickLogic on September 23, 2024 and sell it today you would earn a total of  31.00  from holding QuickLogic or generate 4.12% return on investment over 90 days.

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

QuickLogic  vs.  Power Integrations

QuickLogic

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in QuickLogic are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady forward indicators, QuickLogic may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Power Integrations

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Power Integrations are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Power Integrations is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with QuickLogic and Power Integrations

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

The idea behind QuickLogic and Power Integrations 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.