Correlation Between Wolfspeed and POET Technologies
Can any of the company-specific risk be diversified away by investing in both Wolfspeed and POET Technologies 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 Wolfspeed and POET Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wolfspeed and POET Technologies, you can compare the effects of market volatilities on Wolfspeed and POET Technologies 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 Wolfspeed with a short position of POET Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wolfspeed and POET Technologies.
Diversification Opportunities for Wolfspeed and POET Technologies
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wolfspeed and POET is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Wolfspeed and POET Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on POET Technologies and Wolfspeed 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 Wolfspeed are associated (or correlated) with POET Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of POET Technologies has no effect on the direction of Wolfspeed i.e., Wolfspeed and POET Technologies go up and down completely randomly.
Pair Corralation between Wolfspeed and POET Technologies
Given the investment horizon of 90 days Wolfspeed is expected to generate 18.75 times more return on investment than POET Technologies. However, Wolfspeed is 18.75 times more volatile than POET Technologies. It trades about 0.13 of its potential returns per unit of risk. POET Technologies is currently generating about 0.01 per unit of risk. If you would invest 132.00 in Wolfspeed on August 16, 2025 and sell it today you would earn a total of 1,823 from holding Wolfspeed or generate 1381.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wolfspeed vs. POET Technologies
Performance |
| Timeline |
| Wolfspeed |
| POET Technologies |
Wolfspeed and POET Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wolfspeed and POET Technologies
The main advantage of trading using opposite Wolfspeed and POET Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wolfspeed position performs unexpectedly, POET Technologies 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 POET Technologies will offset losses from the drop in POET Technologies' long position.The idea behind Wolfspeed and POET Technologies pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| POET Technologies vs. Wolfspeed | POET Technologies vs. Arteris | POET Technologies vs. Ambiq Micro, | POET Technologies vs. Sprout Social |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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