Correlation Between Silicon Motion and INTEGR SILICON

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

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

Diversification Opportunities for Silicon Motion and INTEGR SILICON

0.0

Correlation Coefficient

Silicon Motion  INTEGR SILICON

Pay attention - limited upside

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

Pair Corralation between Silicon Motion and INTEGR SILICON

If you would invest  5,460  in Silicon Motion Technology on December 2, 2024 and sell it today you would lose (260.00) from holding Silicon Motion Technology or give up 4.76% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Silicon Motion Technology  vs.  INTEGR SILICON SOL

Silicon Motion Technology

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Silicon Motion Technology are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Silicon Motion is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

INTEGR SILICON SOL

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Silicon Motion and INTEGR SILICON

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

The idea behind Silicon Motion Technology and INTEGR SILICON SOL 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.