Correlation Between Qualcomm Incorporated and NXP Semiconductors
Can any of the company-specific risk be diversified away by investing in both Qualcomm Incorporated and NXP Semiconductors 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 Qualcomm Incorporated and NXP Semiconductors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Qualcomm Incorporated and NXP Semiconductors NV, you can compare the effects of market volatilities on Qualcomm Incorporated and NXP Semiconductors 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 Qualcomm Incorporated with a short position of NXP Semiconductors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qualcomm Incorporated and NXP Semiconductors.
Diversification Opportunities for Qualcomm Incorporated and NXP Semiconductors
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Qualcomm and NXP is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Qualcomm Incorporated and NXP Semiconductors NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NXP Semiconductors and Qualcomm 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 Qualcomm Incorporated are associated (or correlated) with NXP Semiconductors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NXP Semiconductors has no effect on the direction of Qualcomm Incorporated i.e., Qualcomm Incorporated and NXP Semiconductors go up and down completely randomly.
Pair Corralation between Qualcomm Incorporated and NXP Semiconductors
Given the investment horizon of 90 days Qualcomm Incorporated is expected to generate 1.72 times less return on investment than NXP Semiconductors. But when comparing it to its historical volatility, Qualcomm Incorporated is 1.25 times less risky than NXP Semiconductors. It trades about 0.08 of its potential returns per unit of risk. NXP Semiconductors NV is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 19,533 in NXP Semiconductors NV on April 26, 2025 and sell it today you would earn a total of 2,910 from holding NXP Semiconductors NV or generate 14.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qualcomm Incorporated vs. NXP Semiconductors NV
Performance |
| Timeline |
| Qualcomm Incorporated |
| NXP Semiconductors |
Qualcomm Incorporated and NXP Semiconductors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qualcomm Incorporated and NXP Semiconductors
The main advantage of trading using opposite Qualcomm Incorporated and NXP Semiconductors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qualcomm Incorporated position performs unexpectedly, NXP Semiconductors 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 NXP Semiconductors will offset losses from the drop in NXP Semiconductors' long position.| Qualcomm Incorporated vs. Marvell Technology Group | Qualcomm Incorporated vs. Micron Technology | Qualcomm Incorporated vs. Advanced Micro Devices | Qualcomm Incorporated vs. Intel |
| NXP Semiconductors vs. Analog Devices | NXP Semiconductors vs. Qualcomm Incorporated | NXP Semiconductors vs. Broadcom | NXP Semiconductors vs. Microchip Technology |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |