Correlation Between WEEBIT NANO and Silicon Motion

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

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

Diversification Opportunities for WEEBIT NANO and Silicon Motion

0.04

Correlation Coefficient

WEEBIT NANO  Silicon Motion

Significant diversification

The 3 months correlation between WEEBIT and Silicon is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding WEEBIT NANO LTD and Silicon Motion Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silicon Motion Technology and WEEBIT NANO 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 WEEBIT NANO LTD are associated (or correlated) with Silicon Motion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silicon Motion Technology has no effect on the direction of WEEBIT NANO i.e., WEEBIT NANO and Silicon Motion go up and down completely randomly.

Pair Corralation between WEEBIT NANO and Silicon Motion

Assuming the 90 days horizon WEEBIT NANO is expected to generate 1.55 times less return on investment than Silicon Motion. In addition to that, WEEBIT NANO is 1.97 times more volatile than Silicon Motion Technology. It trades about 0.12 of its total potential returns per unit of risk. Silicon Motion Technology is currently generating about 0.37 per unit of volatility. If you would invest  3,307  in Silicon Motion Technology on April 22, 2025 and sell it today you would earn a total of  2,943  from holding Silicon Motion Technology or generate 88.99% return on investment over 90 days.

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

WEEBIT NANO LTD  vs.  Silicon Motion Technology

WEEBIT NANO LTD

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in WEEBIT NANO LTD are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, WEEBIT NANO reported solid returns over the last few months and may actually be approaching a breakup point.

Silicon Motion Technology

Risk-Adjusted Performance

Strong

Over the last 90 days Silicon Motion Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly weak basic indicators, Silicon Motion reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with WEEBIT NANO and Silicon Motion

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

The idea behind WEEBIT NANO LTD and Silicon Motion Technology 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..