Correlation Between Knowles Cor and Silicom

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

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

Diversification Opportunities for Knowles Cor and Silicom

0.69

Correlation Coefficient

Knowles Cor  Silicom

Poor diversification

The 3 months correlation between Knowles and Silicom is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Knowles Cor and Silicom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silicom and Knowles Cor 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 Knowles Cor are associated (or correlated) with Silicom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silicom has no effect on the direction of Knowles Cor i.e., Knowles Cor and Silicom go up and down completely randomly.

Pair Corralation between Knowles Cor and Silicom

Allowing for the 90-day total investment horizon Knowles Cor is expected to generate 0.71 times more return on investment than Silicom. However, Knowles Cor is 1.42 times less risky than Silicom. It trades about 0.16 of its potential returns per unit of risk. Silicom is currently generating about 0.1 per unit of risk. If you would invest  1,632  in Knowles Cor on May 5, 2025 and sell it today you would earn a total of  353.00  from holding Knowles Cor or generate 21.63% return on investment over 90 days.

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

Knowles Cor  vs.  Silicom

Knowles Cor

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Knowles Cor are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, Knowles Cor displayed solid returns over the last few months and may actually be approaching a breakup point.

Silicom

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Silicom are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating essential indicators, Silicom exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Knowles Cor and Silicom

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

The idea behind Knowles Cor and Silicom 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 Transaction History module to view history of all your transactions and understand their impact on performance.