Correlation Between Wisekey International and Navitas Semiconductor

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

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

Diversification Opportunities for Wisekey International and Navitas Semiconductor

0.8

Correlation Coefficient

Wisekey International  Navitas Semiconductor

Very poor diversification

The 3 months correlation between Wisekey and Navitas is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Wisekey International Holding and Navitas Semiconductor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Navitas Semiconductor and Wisekey International 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 Wisekey International Holding are associated (or correlated) with Navitas Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Navitas Semiconductor has no effect on the direction of Wisekey International i.e., Wisekey International and Navitas Semiconductor go up and down completely randomly.

Pair Corralation between Wisekey International and Navitas Semiconductor

Given the investment horizon of 90 days Wisekey International Holding is expected to under-perform the Navitas Semiconductor. In addition to that, Wisekey International is 1.75 times more volatile than Navitas Semiconductor Corp. It trades about -0.05 of its total potential returns per unit of risk. Navitas Semiconductor Corp is currently generating about -0.08 per unit of volatility. If you would invest  386.00  in Navitas Semiconductor Corp on December 21, 2024 and sell it today you would lose (153.50) from holding Navitas Semiconductor Corp or give up 39.77% of portfolio value over 90 days.

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

Wisekey International Holding  vs.  Navitas Semiconductor Corp

Wisekey International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Wisekey International Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Navitas Semiconductor

Risk-Adjusted Performance

Very Weak

Over the last 90 days Navitas Semiconductor Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic 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.

Pair Trading with Wisekey International and Navitas Semiconductor

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

The idea behind Wisekey International Holding and Navitas Semiconductor Corp 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.