Correlation Between CEVA and QuickLogic

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

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

Diversification Opportunities for CEVA and QuickLogic

0.69

Correlation Coefficient

CEVA  QuickLogic

Poor diversification

The 3 months correlation between CEVA and QuickLogic is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding CEVA Inc and QuickLogic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QuickLogic and CEVA 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 CEVA Inc are associated (or correlated) with QuickLogic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QuickLogic has no effect on the direction of CEVA i.e., CEVA and QuickLogic go up and down completely randomly.

Pair Corralation between CEVA and QuickLogic

Given the investment horizon of 90 days CEVA Inc is expected to under-perform the QuickLogic. But the stock apears to be less risky and, when comparing its historical volatility, CEVA Inc is 1.77 times less risky than QuickLogic. The stock trades about -0.24 of its potential returns per unit of risk. The QuickLogic is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest  1,513  in QuickLogic on February 3, 2024 and sell it today you would lose (170.00) from holding QuickLogic or give up 11.24% of portfolio value over 90 days.

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

CEVA Inc  vs.  QuickLogic

CEVA Inc

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CEVA Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, CEVA may actually be approaching a critical reversion point that can send shares even higher in June 2024.

QuickLogic

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in QuickLogic are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite abnormal forward indicators, QuickLogic disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CEVA and QuickLogic

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

The idea behind CEVA Inc and QuickLogic 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 Stocks Directory module to find actively traded stocks across global markets.