Correlation Between Semtech and Allegro Microsystems
Can any of the company-specific risk be diversified away by investing in both Semtech and Allegro Microsystems 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 Semtech and Allegro Microsystems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Semtech and Allegro Microsystems, you can compare the effects of market volatilities on Semtech and Allegro Microsystems 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 Semtech with a short position of Allegro Microsystems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Semtech and Allegro Microsystems.
Diversification Opportunities for Semtech and Allegro Microsystems
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Semtech and Allegro is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Semtech and Allegro Microsystems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allegro Microsystems and Semtech 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 Semtech are associated (or correlated) with Allegro Microsystems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allegro Microsystems has no effect on the direction of Semtech i.e., Semtech and Allegro Microsystems go up and down completely randomly.
Pair Corralation between Semtech and Allegro Microsystems
Given the investment horizon of 90 days Semtech is expected to under-perform the Allegro Microsystems. In addition to that, Semtech is 1.22 times more volatile than Allegro Microsystems. It trades about -0.07 of its total potential returns per unit of risk. Allegro Microsystems is currently generating about -0.01 per unit of volatility. If you would invest 2,875 in Allegro Microsystems on October 8, 2025 and sell it today you would lose (30.00) from holding Allegro Microsystems or give up 1.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Semtech vs. Allegro Microsystems
Performance |
| Timeline |
| Semtech |
| Allegro Microsystems |
Semtech and Allegro Microsystems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Semtech and Allegro Microsystems
The main advantage of trading using opposite Semtech and Allegro Microsystems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Semtech position performs unexpectedly, Allegro Microsystems 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 Allegro Microsystems will offset losses from the drop in Allegro Microsystems' long position.| Semtech vs. Camtek | Semtech vs. Onto Innovation | Semtech vs. Cirrus Logic | Semtech vs. Allegro Microsystems |
| Allegro Microsystems vs. Camtek | Allegro Microsystems vs. Semtech | Allegro Microsystems vs. Impinj Inc | Allegro Microsystems vs. Silicon Laboratories |
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 Stocks Directory module to find actively traded stocks across global markets.
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