Correlation Between Super Micro and Power Integrations
Can any of the company-specific risk be diversified away by investing in both Super Micro and Power Integrations 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 Super Micro and Power Integrations into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Super Micro Computer and Power Integrations, you can compare the effects of market volatilities on Super Micro and Power Integrations 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 Super Micro with a short position of Power Integrations. Check out your portfolio center. Please also check ongoing floating volatility patterns of Super Micro and Power Integrations.
Diversification Opportunities for Super Micro and Power Integrations
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Super and Power is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Super Micro Computer and Power Integrations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Integrations and Super Micro 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 Super Micro Computer are associated (or correlated) with Power Integrations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Integrations has no effect on the direction of Super Micro i.e., Super Micro and Power Integrations go up and down completely randomly.
Pair Corralation between Super Micro and Power Integrations
Given the investment horizon of 90 days Super Micro Computer is expected to generate 1.76 times more return on investment than Power Integrations. However, Super Micro is 1.76 times more volatile than Power Integrations. It trades about 0.14 of its potential returns per unit of risk. Power Integrations is currently generating about 0.04 per unit of risk. If you would invest 3,647 in Super Micro Computer on April 25, 2025 and sell it today you would earn a total of 1,523 from holding Super Micro Computer or generate 41.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Super Micro Computer vs. Power Integrations
Performance |
| Timeline |
| Super Micro Computer |
| Power Integrations |
Super Micro and Power Integrations Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Super Micro and Power Integrations
The main advantage of trading using opposite Super Micro and Power Integrations positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Super Micro position performs unexpectedly, Power Integrations 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 Power Integrations will offset losses from the drop in Power Integrations' long position.| Super Micro vs. International Business Machines | Super Micro vs. Nuvalent | Super Micro vs. Merck Company | Super Micro vs. Amylyx Pharmaceuticals |
| Power Integrations vs. Diodes Incorporated | Power Integrations vs. MACOM Technology Solutions | Power Integrations vs. Cirrus Logic | Power Integrations vs. Amkor 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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