Correlation Between Dolby Laboratories and Semtech
Can any of the company-specific risk be diversified away by investing in both Dolby Laboratories and Semtech 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 Dolby Laboratories and Semtech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dolby Laboratories and Semtech, you can compare the effects of market volatilities on Dolby Laboratories and Semtech 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 Dolby Laboratories with a short position of Semtech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dolby Laboratories and Semtech.
Diversification Opportunities for Dolby Laboratories and Semtech
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dolby and Semtech is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Dolby Laboratories and Semtech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semtech and Dolby Laboratories 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 Dolby Laboratories are associated (or correlated) with Semtech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semtech has no effect on the direction of Dolby Laboratories i.e., Dolby Laboratories and Semtech go up and down completely randomly.
Pair Corralation between Dolby Laboratories and Semtech
Considering the 90-day investment horizon Dolby Laboratories is expected to under-perform the Semtech. But the stock apears to be less risky and, when comparing its historical volatility, Dolby Laboratories is 2.94 times less risky than Semtech. The stock trades about -0.15 of its potential returns per unit of risk. The Semtech is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 4,847 in Semtech on August 20, 2025 and sell it today you would earn a total of 1,619 from holding Semtech or generate 33.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dolby Laboratories vs. Semtech
Performance |
| Timeline |
| Dolby Laboratories |
| Semtech |
Dolby Laboratories and Semtech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dolby Laboratories and Semtech
The main advantage of trading using opposite Dolby Laboratories and Semtech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dolby Laboratories position performs unexpectedly, Semtech 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 Semtech will offset losses from the drop in Semtech's long position.| Dolby Laboratories vs. ExlService Holdings | Dolby Laboratories vs. Kyndryl Holdings | Dolby Laboratories vs. Genpact Limited | Dolby Laboratories vs. Waystar Holding Corp |
| Semtech vs. Camtek | Semtech vs. Onto Innovation | Semtech vs. Cirrus Logic | Semtech vs. Allegro Microsystems |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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