Correlation Between Lattice Semiconductor and MidCap Financial

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Can any of the company-specific risk be diversified away by investing in both Lattice Semiconductor and MidCap Financial 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 Lattice Semiconductor and MidCap Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lattice Semiconductor and MidCap Financial Investment, you can compare the effects of market volatilities on Lattice Semiconductor and MidCap Financial 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 Lattice Semiconductor with a short position of MidCap Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lattice Semiconductor and MidCap Financial.

Diversification Opportunities for Lattice Semiconductor and MidCap Financial

0.26
  Correlation Coefficient

Modest diversification

The 3 months correlation between Lattice and MidCap is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Lattice Semiconductor and MidCap Financial Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MidCap Financial Inv and Lattice Semiconductor 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 Lattice Semiconductor are associated (or correlated) with MidCap Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MidCap Financial Inv has no effect on the direction of Lattice Semiconductor i.e., Lattice Semiconductor and MidCap Financial go up and down completely randomly.

Pair Corralation between Lattice Semiconductor and MidCap Financial

Assuming the 90 days horizon Lattice Semiconductor is expected to generate 3.05 times more return on investment than MidCap Financial. However, Lattice Semiconductor is 3.05 times more volatile than MidCap Financial Investment. It trades about 0.07 of its potential returns per unit of risk. MidCap Financial Investment is currently generating about 0.13 per unit of risk. If you would invest  3,945  in Lattice Semiconductor on April 23, 2025 and sell it today you would earn a total of  511.00  from holding Lattice Semiconductor or generate 12.95% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Lattice Semiconductor  vs.  MidCap Financial Investment

 Performance 
       Timeline  
Lattice Semiconductor 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Lattice Semiconductor are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Lattice Semiconductor reported solid returns over the last few months and may actually be approaching a breakup point.
MidCap Financial Inv 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in MidCap Financial Investment are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, MidCap Financial may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Lattice Semiconductor and MidCap Financial Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Lattice Semiconductor and MidCap Financial

The main advantage of trading using opposite Lattice Semiconductor and MidCap Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lattice Semiconductor position performs unexpectedly, MidCap Financial 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 MidCap Financial will offset losses from the drop in MidCap Financial's long position.
The idea behind Lattice Semiconductor and MidCap Financial Investment 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..

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