Correlation Between METTLER TOLEDO and Silicon Motion

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

By analyzing existing cross correlation between METTLER TOLEDO INTL and Silicon Motion Technology, you can compare the effects of market volatilities on METTLER TOLEDO and Silicon Motion 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 METTLER TOLEDO with a short position of Silicon Motion. Check out your portfolio center. Please also check ongoing floating volatility patterns of METTLER TOLEDO and Silicon Motion.

Diversification Opportunities for METTLER TOLEDO and Silicon Motion

0.64

Correlation Coefficient

METTLER TOLEDO  Silicon Motion

Poor diversification

The 3 months correlation between METTLER and Silicon is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding METTLER TOLEDO INTL and Silicon Motion Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silicon Motion Technology and METTLER TOLEDO 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 METTLER TOLEDO INTL are associated (or correlated) with Silicon Motion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silicon Motion Technology has no effect on the direction of METTLER TOLEDO i.e., METTLER TOLEDO and Silicon Motion go up and down completely randomly.

Pair Corralation between METTLER TOLEDO and Silicon Motion

Assuming the 90 days trading horizon METTLER TOLEDO is expected to generate 4.47 times less return on investment than Silicon Motion. But when comparing it to its historical volatility, METTLER TOLEDO INTL is 1.18 times less risky than Silicon Motion. It trades about 0.08 of its potential returns per unit of risk. Silicon Motion Technology is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest  3,882  in Silicon Motion Technology on April 25, 2025 and sell it today you would earn a total of  2,368  from holding Silicon Motion Technology or generate 61.0% return on investment over 90 days.

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

METTLER TOLEDO INTL  vs.  Silicon Motion Technology

METTLER TOLEDO INTL

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in METTLER TOLEDO INTL are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, METTLER TOLEDO may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Silicon Motion Technology

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Silicon Motion Technology are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Silicon Motion reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with METTLER TOLEDO and Silicon Motion

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

The idea behind METTLER TOLEDO INTL and Silicon Motion Technology 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.