Correlation Between Advanced Micro and Diodes Incorporated
Can any of the company-specific risk be diversified away by investing in both Advanced Micro and Diodes Incorporated 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 Advanced Micro and Diodes Incorporated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Micro Devices and Diodes Incorporated, you can compare the effects of market volatilities on Advanced Micro and Diodes Incorporated 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 Advanced Micro with a short position of Diodes Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Micro and Diodes Incorporated.
Diversification Opportunities for Advanced Micro and Diodes Incorporated
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Advanced and Diodes is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Micro Devices and Diodes Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diodes Incorporated and Advanced 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 Advanced Micro Devices are associated (or correlated) with Diodes Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diodes Incorporated has no effect on the direction of Advanced Micro i.e., Advanced Micro and Diodes Incorporated go up and down completely randomly.
Pair Corralation between Advanced Micro and Diodes Incorporated
Considering the 90-day investment horizon Advanced Micro Devices is expected to under-perform the Diodes Incorporated. In addition to that, Advanced Micro is 1.48 times more volatile than Diodes Incorporated. It trades about -0.22 of its total potential returns per unit of risk. Diodes Incorporated is currently generating about 0.08 per unit of volatility. If you would invest 7,038 in Diodes Incorporated on January 27, 2024 and sell it today you would earn a total of 230.00 from holding Diodes Incorporated or generate 3.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Micro Devices vs. Diodes Incorporated
Performance |
| Timeline |
| Advanced Micro Devices |
| Diodes Incorporated |
Advanced Micro and Diodes Incorporated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Micro and Diodes Incorporated
The main advantage of trading using opposite Advanced Micro and Diodes Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Micro position performs unexpectedly, Diodes Incorporated 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 Diodes Incorporated will offset losses from the drop in Diodes Incorporated's long position.| Advanced Micro vs. Taiwan Semiconductor Manufacturing | Advanced Micro vs. Intel | Advanced Micro vs. Marvell Technology Group | Advanced Micro vs. Micron Technology |
| Diodes Incorporated vs. Silicon Laboratories | Diodes Incorporated vs. MACOM Technology Solutions | Diodes Incorporated vs. FormFactor | Diodes Incorporated 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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