Correlation Between Microchip Technology and Silicon Laboratories
Can any of the company-specific risk be diversified away by investing in both Microchip Technology and Silicon Laboratories 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 Microchip Technology and Silicon Laboratories into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microchip Technology and Silicon Laboratories, you can compare the effects of market volatilities on Microchip Technology and Silicon Laboratories 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 Microchip Technology with a short position of Silicon Laboratories. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microchip Technology and Silicon Laboratories.
Diversification Opportunities for Microchip Technology and Silicon Laboratories
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Microchip and Silicon is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Microchip Technology and Silicon Laboratories in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silicon Laboratories and Microchip Technology 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 Microchip Technology are associated (or correlated) with Silicon Laboratories. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silicon Laboratories has no effect on the direction of Microchip Technology i.e., Microchip Technology and Silicon Laboratories go up and down completely randomly.
Pair Corralation between Microchip Technology and Silicon Laboratories
Given the investment horizon of 90 days Microchip Technology is expected to generate 5.27 times less return on investment than Silicon Laboratories. In addition to that, Microchip Technology is 1.01 times more volatile than Silicon Laboratories. It trades about 0.0 of its total potential returns per unit of risk. Silicon Laboratories is currently generating about 0.02 per unit of volatility. If you would invest 14,914 in Silicon Laboratories on April 20, 2025 and sell it today you would earn a total of 49.00 from holding Silicon Laboratories or generate 0.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microchip Technology vs. Silicon Laboratories
Performance |
| Timeline |
| Microchip Technology |
| Silicon Laboratories |
Microchip Technology and Silicon Laboratories Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microchip Technology and Silicon Laboratories
The main advantage of trading using opposite Microchip Technology and Silicon Laboratories positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microchip Technology position performs unexpectedly, Silicon Laboratories 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 Laboratories will offset losses from the drop in Silicon Laboratories' long position.| Microchip Technology vs. Texas Instruments Incorporated | Microchip Technology vs. ON Semiconductor | Microchip Technology vs. Analog Devices | Microchip Technology vs. Qorvo Inc |
| Silicon Laboratories vs. Amkor Technology | Silicon Laboratories vs. Cirrus Logic | Silicon Laboratories vs. Diodes Incorporated | Silicon Laboratories vs. Lattice Semiconductor |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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