Correlation Between Advanced Analogic and Arteris

Can any of the company-specific risk be diversified away by investing in both Advanced Analogic and Arteris 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 Analogic and Arteris into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Advanced Analogic Technologies and Arteris, you can compare the effects of market volatilities on Advanced Analogic and Arteris 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 Analogic with a short position of Arteris. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Analogic and Arteris.

Diversification Opportunities for Advanced Analogic and Arteris

0.0

Correlation Coefficient

Advanced Analogic  Arteris

Pay attention - limited upside

The 3 months correlation between Advanced and Arteris is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Analogic Technologies and Arteris in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arteris and Advanced Analogic 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 Analogic Technologies are associated (or correlated) with Arteris. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arteris has no effect on the direction of Advanced Analogic i.e., Advanced Analogic and Arteris go up and down completely randomly.

Pair Corralation between Advanced Analogic and Arteris

If you would invest (100.00) in Advanced Analogic Technologies on January 24, 2024 and sell it today you would earn a total of  100.00  from holding Advanced Analogic Technologies or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Advanced Analogic Technologies  vs.  Arteris

Advanced Analogic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Advanced Analogic Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Advanced Analogic is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Arteris

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Arteris are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating forward indicators, Arteris may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with Advanced Analogic and Arteris

The main advantage of trading using opposite Advanced Analogic and Arteris positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Analogic position performs unexpectedly, Arteris 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 Arteris will offset losses from the drop in Arteris' long position.

The idea behind Advanced Analogic Technologies and Arteris 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.

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.