Correlation Between Knowles Cor and Silicom
Can any of the company-specific risk be diversified away by investing in both Knowles Cor and Silicom 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 Knowles Cor and Silicom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Knowles Cor and Silicom, you can compare the effects of market volatilities on Knowles Cor and Silicom 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 Knowles Cor with a short position of Silicom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knowles Cor and Silicom.
Diversification Opportunities for Knowles Cor and Silicom
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Knowles and Silicom is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Knowles Cor and Silicom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silicom and Knowles Cor 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 Knowles Cor are associated (or correlated) with Silicom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silicom has no effect on the direction of Knowles Cor i.e., Knowles Cor and Silicom go up and down completely randomly.
Pair Corralation between Knowles Cor and Silicom
Allowing for the 90-day total investment horizon Knowles Cor is expected to generate 1.2 times more return on investment than Silicom. However, Knowles Cor is 1.2 times more volatile than Silicom. It trades about 0.03 of its potential returns per unit of risk. Silicom is currently generating about 0.01 per unit of risk. If you would invest 1,620 in Knowles Cor on March 15, 2025 and sell it today you would earn a total of 59.00 from holding Knowles Cor or generate 3.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Knowles Cor vs. Silicom
Performance |
| Timeline |
| Knowles Cor |
| Silicom |
Knowles Cor and Silicom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Knowles Cor and Silicom
The main advantage of trading using opposite Knowles Cor and Silicom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knowles Cor position performs unexpectedly, Silicom 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 Silicom will offset losses from the drop in Silicom's long position.| Knowles Cor vs. Comtech Telecommunications Corp | Knowles Cor vs. Ituran Location and | Knowles Cor vs. Aviat Networks | Knowles Cor vs. Extreme Networks |
| Silicom vs. Ituran Location and | Silicom vs. Sapiens International | Silicom vs. Allot Communications | Silicom vs. Radcom |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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