Correlation Between BlackRock Capital and Silicon Motion

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

By analyzing existing cross correlation between BlackRock Capital Allocation and Silicon Motion Technology, you can compare the effects of market volatilities on BlackRock Capital and Silicon Motion 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 BlackRock Capital with a short position of Silicon Motion. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock Capital and Silicon Motion.

Diversification Opportunities for BlackRock Capital and Silicon Motion

0.7

Correlation Coefficient

BlackRock Capital  Silicon Motion

Poor diversification

The 3 months correlation between BlackRock and Silicon is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock Capital Allocation and Silicon Motion Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silicon Motion Technology and BlackRock Capital 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 BlackRock Capital Allocation are associated (or correlated) with Silicon Motion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silicon Motion Technology has no effect on the direction of BlackRock Capital i.e., BlackRock Capital and Silicon Motion go up and down completely randomly.

Pair Corralation between BlackRock Capital and Silicon Motion

Given the investment horizon of 90 days BlackRock Capital is expected to generate 5.72 times less return on investment than Silicon Motion. But when comparing it to its historical volatility, BlackRock Capital Allocation is 3.56 times less risky than Silicon Motion. It trades about 0.17 of its potential returns per unit of risk. Silicon Motion Technology is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  4,510  in Silicon Motion Technology on May 6, 2025 and sell it today you would earn a total of  2,040  from holding Silicon Motion Technology or generate 45.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	96.92%
Values	Daily Returns

BlackRock Capital Allocation  vs.  Silicon Motion Technology

BlackRock Capital

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock Capital Allocation are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, BlackRock Capital may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Silicon Motion Technology

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Silicon Motion Technology are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Silicon Motion unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BlackRock Capital and Silicon Motion

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

The idea behind BlackRock Capital Allocation and Silicon Motion Technology 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.