Correlation Between SemiLEDS and Vuzix Corp

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

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

Diversification Opportunities for SemiLEDS and Vuzix Corp

0.73

Correlation Coefficient

SemiLEDS  Vuzix Corp

Poor diversification

The 3 months correlation between SemiLEDS and Vuzix is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding SemiLEDS and Vuzix Corp Cmn in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vuzix Corp Cmn and SemiLEDS 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 SemiLEDS are associated (or correlated) with Vuzix Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vuzix Corp Cmn has no effect on the direction of SemiLEDS i.e., SemiLEDS and Vuzix Corp go up and down completely randomly.

Pair Corralation between SemiLEDS and Vuzix Corp

Given the investment horizon of 90 days SemiLEDS is expected to under-perform the Vuzix Corp. But the stock apears to be less risky and, when comparing its historical volatility, SemiLEDS is 1.24 times less risky than Vuzix Corp. The stock trades about -0.03 of its potential returns per unit of risk. The Vuzix Corp Cmn is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  190.00  in Vuzix Corp Cmn on May 1, 2025 and sell it today you would earn a total of  17.00  from holding Vuzix Corp Cmn or generate 8.95% return on investment over 90 days.

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

SemiLEDS  vs.  Vuzix Corp Cmn

SemiLEDS

Risk-Adjusted Performance

Very Weak

Over the last 90 days SemiLEDS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Vuzix Corp Cmn

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Vuzix Corp Cmn are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, Vuzix Corp demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SemiLEDS and Vuzix Corp

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

The idea behind SemiLEDS and Vuzix Corp Cmn 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..