Correlation Between Arm Holdings and Lattice Semiconductor

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

By analyzing existing cross correlation between Arm Holdings plc and Lattice Semiconductor, you can compare the effects of market volatilities on Arm Holdings and Lattice Semiconductor 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 Arm Holdings with a short position of Lattice Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arm Holdings and Lattice Semiconductor.

Diversification Opportunities for Arm Holdings and Lattice Semiconductor

-0.38

Correlation Coefficient

Arm Holdings  Lattice Semiconductor

Very good diversification

The 3 months correlation between Arm and Lattice is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Arm Holdings plc and Lattice Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lattice Semiconductor and Arm Holdings 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 Arm Holdings plc are associated (or correlated) with Lattice Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lattice Semiconductor has no effect on the direction of Arm Holdings i.e., Arm Holdings and Lattice Semiconductor go up and down completely randomly.

Pair Corralation between Arm Holdings and Lattice Semiconductor

Considering the 90-day investment horizon Arm Holdings is expected to generate 5.73 times less return on investment than Lattice Semiconductor. In addition to that, Arm Holdings is 1.03 times more volatile than Lattice Semiconductor. It trades about 0.03 of its total potential returns per unit of risk. Lattice Semiconductor is currently generating about 0.21 per unit of volatility. If you would invest  5,088  in Lattice Semiconductor on July 6, 2025 and sell it today you would earn a total of  2,183  from holding Lattice Semiconductor or generate 42.9% return on investment over 90 days.

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

Arm Holdings plc  vs.  Lattice Semiconductor

Arm Holdings plc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Arm Holdings plc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Arm Holdings may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Lattice Semiconductor

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Lattice Semiconductor are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting fundamental indicators, Lattice Semiconductor exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Arm Holdings and Lattice Semiconductor

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

The idea behind Arm Holdings plc and Lattice Semiconductor 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.