Correlation Between DSP and Advanced Micro

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

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

Diversification Opportunities for DSP and Advanced Micro

0.0

Correlation Coefficient

DSP  Advanced Micro

Pay attention - limited upside

The 3 months correlation between DSP and Advanced is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding DSP Group and Advanced Micro Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Micro Devices and DSP 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 DSP Group are associated (or correlated) with Advanced Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Micro Devices has no effect on the direction of DSP i.e., DSP and Advanced Micro go up and down completely randomly.

Pair Corralation between DSP and Advanced Micro

If you would invest (100.00) in DSP Group on January 24, 2024 and sell it today you would earn a total of  100.00  from holding DSP Group or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

DSP Group  vs.  Advanced Micro Devices

DSP Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DSP Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, DSP is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Advanced Micro Devices

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Advanced Micro Devices 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 primary indicators remain rather sound which may send shares a bit higher in May 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with DSP and Advanced Micro

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

The idea behind DSP Group and Advanced Micro Devices 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 Transaction History module to view history of all your transactions and understand their impact on performance.