Correlation Between Analog Devices and ScanTech

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

By analyzing existing cross correlation between Analog Devices and ScanTech AI Systems, you can compare the effects of market volatilities on Analog Devices and ScanTech 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 Analog Devices with a short position of ScanTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Analog Devices and ScanTech.

Diversification Opportunities for Analog Devices and ScanTech

-0.92

Correlation Coefficient

Analog Devices  ScanTech

Pay attention - limited upside

The 3 months correlation between Analog and ScanTech is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding Analog Devices and ScanTech AI Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ScanTech AI Systems and Analog Devices 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 Analog Devices are associated (or correlated) with ScanTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ScanTech AI Systems has no effect on the direction of Analog Devices i.e., Analog Devices and ScanTech go up and down completely randomly.

Pair Corralation between Analog Devices and ScanTech

Considering the 90-day investment horizon Analog Devices is expected to generate 0.36 times more return on investment than ScanTech. However, Analog Devices is 2.77 times less risky than ScanTech. It trades about 0.28 of its potential returns per unit of risk. ScanTech AI Systems is currently generating about -0.25 per unit of risk. If you would invest  17,769  in Analog Devices on April 22, 2025 and sell it today you would earn a total of  6,514  from holding Analog Devices or generate 36.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Analog Devices  vs.  ScanTech AI Systems

Analog Devices

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Analog Devices are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile fundamental indicators, Analog Devices demonstrated solid returns over the last few months and may actually be approaching a breakup point.

ScanTech AI Systems

Risk-Adjusted Performance

Very Weak

Over the last 90 days ScanTech AI Systems has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in August 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Analog Devices and ScanTech

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

The idea behind Analog Devices and ScanTech AI Systems 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.

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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.