Correlation Between SILICON LABORATOR and CeoTronics

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

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

Diversification Opportunities for SILICON LABORATOR and CeoTronics

-0.1

Correlation Coefficient

SILICON LABORATOR  CeoTronics

Good diversification

The 3 months correlation between SILICON and CeoTronics is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding SILICON LABORATOR and CeoTronics AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CeoTronics AG and SILICON LABORATOR 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 SILICON LABORATOR are associated (or correlated) with CeoTronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CeoTronics AG has no effect on the direction of SILICON LABORATOR i.e., SILICON LABORATOR and CeoTronics go up and down completely randomly.

Pair Corralation between SILICON LABORATOR and CeoTronics

Assuming the 90 days trading horizon SILICON LABORATOR is expected to generate 0.9 times more return on investment than CeoTronics. However, SILICON LABORATOR is 1.12 times less risky than CeoTronics. It trades about 0.25 of its potential returns per unit of risk. CeoTronics AG is currently generating about -0.05 per unit of risk. If you would invest  7,850  in SILICON LABORATOR on April 20, 2025 and sell it today you would earn a total of  4,850  from holding SILICON LABORATOR or generate 61.78% return on investment over 90 days.

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

SILICON LABORATOR  vs.  CeoTronics AG

SILICON LABORATOR

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SILICON LABORATOR are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, SILICON LABORATOR unveiled solid returns over the last few months and may actually be approaching a breakup point.

CeoTronics AG

Risk-Adjusted Performance

Very Weak

Over the last 90 days CeoTronics AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's forward-looking signals remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with SILICON LABORATOR and CeoTronics

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

The idea behind SILICON LABORATOR and CeoTronics AG 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.