Correlation Between Recon Technology and Silicon Motion
Can any of the company-specific risk be diversified away by investing in both Recon Technology 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 Recon Technology and Silicon Motion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Recon Technology and Silicon Motion Technology, you can compare the effects of market volatilities on Recon Technology 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 Recon Technology with a short position of Silicon Motion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Recon Technology and Silicon Motion.
Diversification Opportunities for Recon Technology and Silicon Motion
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Recon and Silicon is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Recon Technology 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 Recon 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 Recon Technology 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 Recon Technology i.e., Recon Technology and Silicon Motion go up and down completely randomly.
Pair Corralation between Recon Technology and Silicon Motion
Given the investment horizon of 90 days Recon Technology is expected to generate 5.9 times more return on investment than Silicon Motion. However, Recon Technology is 5.9 times more volatile than Silicon Motion Technology. It trades about 0.05 of its potential returns per unit of risk. Silicon Motion Technology is currently generating about 0.17 per unit of risk. If you would invest 221.00 in Recon Technology on June 3, 2025 and sell it today you would lose (10.00) from holding Recon Technology or give up 4.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Recon Technology vs. Silicon Motion Technology
Performance |
| Timeline |
| Recon Technology |
| Silicon Motion Technology |
Recon Technology and Silicon Motion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Recon Technology and Silicon Motion
The main advantage of trading using opposite Recon Technology and Silicon Motion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Recon Technology 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.| Recon Technology vs. Flotek Industries | Recon Technology vs. Nextmart | Recon Technology vs. SemiLEDS | Recon Technology vs. LM Funding America |
| Silicon Motion vs. SolarEdge Technologies | Silicon Motion vs. First Solar | Silicon Motion vs. Sunrun Inc | Silicon Motion vs. Canadian Solar |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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