Correlation Between Diodes Incorporated and Silicon Motion
Can any of the company-specific risk be diversified away by investing in both Diodes Incorporated 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 Diodes Incorporated and Silicon Motion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Diodes Incorporated and Silicon Motion Technology, you can compare the effects of market volatilities on Diodes Incorporated 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 Diodes Incorporated with a short position of Silicon Motion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diodes Incorporated and Silicon Motion.
Diversification Opportunities for Diodes Incorporated and Silicon Motion
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Diodes and Silicon is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Diodes Incorporated 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 Diodes Incorporated 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 Diodes Incorporated 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 Diodes Incorporated i.e., Diodes Incorporated and Silicon Motion go up and down completely randomly.
Pair Corralation between Diodes Incorporated and Silicon Motion
Given the investment horizon of 90 days Diodes Incorporated is expected to generate 2.49 times less return on investment than Silicon Motion. In addition to that, Diodes Incorporated is 1.04 times more volatile than Silicon Motion Technology. It trades about 0.07 of its total potential returns per unit of risk. Silicon Motion Technology is currently generating about 0.17 per unit of volatility. If you would invest 7,530 in Silicon Motion Technology on July 27, 2025 and sell it today you would earn a total of 2,383 from holding Silicon Motion Technology or generate 31.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diodes Incorporated vs. Silicon Motion Technology
Performance |
| Timeline |
| Diodes Incorporated |
| Silicon Motion Technology |
Diodes Incorporated and Silicon Motion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diodes Incorporated and Silicon Motion
The main advantage of trading using opposite Diodes Incorporated and Silicon Motion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diodes Incorporated 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.| Diodes Incorporated vs. Sunrun Inc | Diodes Incorporated vs. NOV Inc | Diodes Incorporated vs. Frontline | Diodes Incorporated vs. Valvoline |
| Silicon Motion vs. FormFactor | Silicon Motion vs. Navitas Semiconductor Corp | Silicon Motion vs. Diodes Incorporated | Silicon Motion vs. Power Integrations |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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