Correlation Between Silicom and AudioCodes
Can any of the company-specific risk be diversified away by investing in both Silicom and AudioCodes 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 Silicom and AudioCodes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Silicom and AudioCodes, you can compare the effects of market volatilities on Silicom and AudioCodes 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 Silicom with a short position of AudioCodes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silicom and AudioCodes.
Diversification Opportunities for Silicom and AudioCodes
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Silicom and AudioCodes is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Silicom and AudioCodes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AudioCodes and Silicom 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 Silicom are associated (or correlated) with AudioCodes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AudioCodes has no effect on the direction of Silicom i.e., Silicom and AudioCodes go up and down completely randomly.
Pair Corralation between Silicom and AudioCodes
Given the investment horizon of 90 days Silicom is expected to generate 1.05 times more return on investment than AudioCodes. However, Silicom is 1.05 times more volatile than AudioCodes. It trades about 0.06 of its potential returns per unit of risk. AudioCodes is currently generating about 0.03 per unit of risk. If you would invest 1,450 in Silicom on March 27, 2025 and sell it today you would earn a total of 74.00 from holding Silicom or generate 5.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Silicom vs. AudioCodes
Performance |
| Timeline |
| Silicom |
| AudioCodes |
Silicom and AudioCodes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Silicom and AudioCodes
The main advantage of trading using opposite Silicom and AudioCodes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silicom position performs unexpectedly, AudioCodes 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 AudioCodes will offset losses from the drop in AudioCodes' long position.| Silicom vs. Ituran Location and | Silicom vs. Sapiens International | Silicom vs. Allot Communications | Silicom vs. Radcom |
| AudioCodes vs. Aviat Networks | AudioCodes vs. Silicom | AudioCodes vs. Gilat Satellite Networks | AudioCodes vs. Cambium Networks Corp |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Stocks Directory Find actively traded stocks across global markets | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |