Correlation Between Analog Devices and Arm Holdings
Can any of the company-specific risk be diversified away by investing in both Analog Devices and Arm Holdings 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 Analog Devices and Arm Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Analog Devices and Arm Holdings plc, you can compare the effects of market volatilities on Analog Devices and Arm Holdings 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 Analog Devices with a short position of Arm Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Analog Devices and Arm Holdings.
Diversification Opportunities for Analog Devices and Arm Holdings
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Analog and Arm is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Analog Devices and Arm Holdings plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arm Holdings plc and Analog Devices 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 Analog Devices are associated (or correlated) with Arm Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arm Holdings plc has no effect on the direction of Analog Devices i.e., Analog Devices and Arm Holdings go up and down completely randomly.
Pair Corralation between Analog Devices and Arm Holdings
Considering the 90-day investment horizon Analog Devices is expected to generate 0.57 times more return on investment than Arm Holdings. However, Analog Devices is 1.75 times less risky than Arm Holdings. It trades about 0.08 of its potential returns per unit of risk. Arm Holdings plc is currently generating about 0.03 per unit of risk. If you would invest 24,455 in Analog Devices on September 3, 2025 and sell it today you would earn a total of 2,196 from holding Analog Devices or generate 8.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Analog Devices vs. Arm Holdings plc
Performance |
| Timeline |
| Analog Devices |
| Arm Holdings plc |
Analog Devices and Arm Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Analog Devices and Arm Holdings
The main advantage of trading using opposite Analog Devices and Arm Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Analog Devices position performs unexpectedly, Arm Holdings 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 Arm Holdings will offset losses from the drop in Arm Holdings' long position.| Analog Devices vs. Renewable Energy Trade | Analog Devices vs. Vice Health and | Analog Devices vs. Lippo Malls Indonesia | Analog Devices vs. Tekla Healthcare Investors |
| Arm Holdings vs. Technology Telecommunication Acquisition | Arm Holdings vs. Tel Instrument Electronics Corp | Arm Holdings vs. D MARKET Electronic Services | Arm Holdings vs. Jaco Electronics |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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