Correlation Between Analog Devices, and Skyworks Solutions

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

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

Diversification Opportunities for Analog Devices, and Skyworks Solutions

0.87

Correlation Coefficient

Analog Devices,  Skyworks Solutions

Very poor diversification

The 3 months correlation between Analog and Skyworks is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Analog Devices, and Skyworks Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skyworks Solutions and Analog Devices, 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 Analog Devices, are associated (or correlated) with Skyworks Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skyworks Solutions has no effect on the direction of Analog Devices, i.e., Analog Devices, and Skyworks Solutions go up and down completely randomly.

Pair Corralation between Analog Devices, and Skyworks Solutions

Assuming the 90 days trading horizon Analog Devices, is expected to generate 1.03 times more return on investment than Skyworks Solutions. However, Analog Devices, is 1.03 times more volatile than Skyworks Solutions. It trades about 0.24 of its potential returns per unit of risk. Skyworks Solutions is currently generating about 0.19 per unit of risk. If you would invest  50,969  in Analog Devices, on April 22, 2025 and sell it today you would earn a total of  15,628  from holding Analog Devices, or generate 30.66% return on investment over 90 days.

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

Analog Devices,  vs.  Skyworks Solutions

Analog Devices,

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Analog Devices, are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Analog Devices, sustained solid returns over the last few months and may actually be approaching a breakup point.

Skyworks Solutions

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Skyworks Solutions are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Skyworks Solutions sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Analog Devices, and Skyworks Solutions

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

The idea behind Analog Devices, and Skyworks Solutions 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.