Correlation Between Silicon Motion and SemiLEDS
Can any of the company-specific risk be diversified away by investing in both Silicon Motion and SemiLEDS 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 Silicon Motion and SemiLEDS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Silicon Motion Technology and SemiLEDS, you can compare the effects of market volatilities on Silicon Motion and SemiLEDS 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 Silicon Motion with a short position of SemiLEDS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silicon Motion and SemiLEDS.
Diversification Opportunities for Silicon Motion and SemiLEDS
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Silicon and SemiLEDS is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Silicon Motion Technology and SemiLEDS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SemiLEDS and Silicon Motion 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 Silicon Motion Technology are associated (or correlated) with SemiLEDS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SemiLEDS has no effect on the direction of Silicon Motion i.e., Silicon Motion and SemiLEDS go up and down completely randomly.
Pair Corralation between Silicon Motion and SemiLEDS
Given the investment horizon of 90 days Silicon Motion Technology is expected to generate 0.43 times more return on investment than SemiLEDS. However, Silicon Motion Technology is 2.33 times less risky than SemiLEDS. It trades about 0.29 of its potential returns per unit of risk. SemiLEDS is currently generating about -0.04 per unit of risk. If you would invest 5,301 in Silicon Motion Technology on May 2, 2025 and sell it today you would earn a total of 2,363 from holding Silicon Motion Technology or generate 44.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Silicon Motion Technology vs. SemiLEDS
Performance |
| Timeline |
| Silicon Motion Technology |
| SemiLEDS |
Silicon Motion and SemiLEDS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Silicon Motion and SemiLEDS
The main advantage of trading using opposite Silicon Motion and SemiLEDS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silicon Motion position performs unexpectedly, SemiLEDS 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 SemiLEDS will offset losses from the drop in SemiLEDS's long position.| Silicon Motion vs. ASE Industrial Holding | Silicon Motion vs. Himax Technologies | Silicon Motion vs. United Microelectronics | Silicon Motion vs. MaxLinear |
| SemiLEDS vs. Nano Labs | SemiLEDS vs. ChipMOS Technologies | SemiLEDS vs. Wisekey International Holding | SemiLEDS vs. Silicon Motion 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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