Correlation Between Monolithic Power and Perkins Select

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

By analyzing existing cross correlation between Monolithic Power Systems and Perkins Select Value, you can compare the effects of market volatilities on Monolithic Power and Perkins Select 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 Monolithic Power with a short position of Perkins Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monolithic Power and Perkins Select.

Diversification Opportunities for Monolithic Power and Perkins Select

0.23

Correlation Coefficient

Monolithic Power  Perkins Select

Modest diversification

The 3 months correlation between Monolithic and Perkins is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Monolithic Power Systems and Perkins Select Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perkins Select Value and Monolithic Power 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 Monolithic Power Systems are associated (or correlated) with Perkins Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perkins Select Value has no effect on the direction of Monolithic Power i.e., Monolithic Power and Perkins Select go up and down completely randomly.

Pair Corralation between Monolithic Power and Perkins Select

Given the investment horizon of 90 days Monolithic Power Systems is expected to generate 1.93 times more return on investment than Perkins Select. However, Monolithic Power is 1.93 times more volatile than Perkins Select Value. It trades about 0.09 of its potential returns per unit of risk. Perkins Select Value is currently generating about -0.05 per unit of risk. If you would invest  84,821  in Monolithic Power Systems on September 13, 2025 and sell it today you would earn a total of  13,327  from holding Monolithic Power Systems or generate 15.71% return on investment over 90 days.

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

Monolithic Power Systems  vs.  Perkins Select Value

Monolithic Power Systems

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Monolithic Power Systems are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, Monolithic Power reported solid returns over the last few months and may actually be approaching a breakup point.

Perkins Select Value

Risk-Adjusted Performance

Weakest

Over the last 90 days Perkins Select Value has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Perkins Select is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Monolithic Power and Perkins Select

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

The idea behind Monolithic Power Systems and Perkins Select Value 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.