Correlation Between QuickLogic and CEVA

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

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

Diversification Opportunities for QuickLogic and CEVA

0.69

Correlation Coefficient

QuickLogic  CEVA

Poor diversification

The 3 months correlation between QuickLogic and CEVA is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding QuickLogic and CEVA Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEVA Inc and QuickLogic 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 QuickLogic are associated (or correlated) with CEVA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEVA Inc has no effect on the direction of QuickLogic i.e., QuickLogic and CEVA go up and down completely randomly.

Pair Corralation between QuickLogic and CEVA

Given the investment horizon of 90 days QuickLogic is expected to under-perform the CEVA. In addition to that, QuickLogic is 1.75 times more volatile than CEVA Inc. It trades about -0.13 of its total potential returns per unit of risk. CEVA Inc is currently generating about -0.22 per unit of volatility. If you would invest  2,248  in CEVA Inc on February 2, 2024 and sell it today you would lose (267.00) from holding CEVA Inc or give up 11.88% of portfolio value over 90 days.

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

QuickLogic  vs.  CEVA Inc

QuickLogic

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in QuickLogic are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward indicators, QuickLogic disclosed solid returns over the last few months and may actually be approaching a breakup point.

CEVA Inc

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CEVA Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, CEVA may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with QuickLogic and CEVA

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

The idea behind QuickLogic and CEVA Inc 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.