Correlation Between Wisekey International and Sitime

Can any of the company-specific risk be diversified away by investing in both Wisekey International and Sitime 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 Sitime 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 Sitime, you can compare the effects of market volatilities on Wisekey International and Sitime 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 Sitime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wisekey International and Sitime.

Diversification Opportunities for Wisekey International and Sitime

0.23

Correlation Coefficient

Wisekey International  Sitime

Modest diversification

The 3 months correlation between Wisekey and Sitime is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Wisekey International Holding and Sitime in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sitime 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 Sitime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sitime has no effect on the direction of Wisekey International i.e., Wisekey International and Sitime go up and down completely randomly.

Pair Corralation between Wisekey International and Sitime

Given the investment horizon of 90 days Wisekey International Holding is expected to generate 4.33 times more return on investment than Sitime. However, Wisekey International is 4.33 times more volatile than Sitime. It trades about 0.12 of its potential returns per unit of risk. Sitime is currently generating about -0.08 per unit of risk. If you would invest  205.00  in Wisekey International Holding on December 5, 2024 and sell it today you would earn a total of  161.00  from holding Wisekey International Holding or generate 78.54% return on investment over 90 days.

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

Wisekey International Holding  vs.  Sitime

Wisekey International

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Wisekey International Holding are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain technical and fundamental indicators, Wisekey International showed solid returns over the last few months and may actually be approaching a breakup point.

Sitime

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sitime has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Wisekey International and Sitime

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

The idea behind Wisekey International Holding and Sitime 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 Global Correlations module to find global opportunities by holding instruments from different markets.