Correlation Between Lantronix and SemiLEDS

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

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

Diversification Opportunities for Lantronix and SemiLEDS

-0.67

Correlation Coefficient

Lantronix  SemiLEDS

Excellent diversification

The 3 months correlation between Lantronix and SemiLEDS is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Lantronix and SemiLEDS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SemiLEDS and Lantronix 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 Lantronix are associated (or correlated) with SemiLEDS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SemiLEDS has no effect on the direction of Lantronix i.e., Lantronix and SemiLEDS go up and down completely randomly.

Pair Corralation between Lantronix and SemiLEDS

Given the investment horizon of 90 days Lantronix is expected to generate 0.85 times more return on investment than SemiLEDS. However, Lantronix is 1.18 times less risky than SemiLEDS. It trades about 0.19 of its potential returns per unit of risk. SemiLEDS is currently generating about -0.09 per unit of risk. If you would invest  225.00  in Lantronix on May 25, 2025 and sell it today you would earn a total of  122.00  from holding Lantronix or generate 54.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Lantronix  vs.  SemiLEDS

Lantronix

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Lantronix are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Lantronix showed solid returns over the last few months and may actually be approaching a breakup point.

SemiLEDS

Risk-Adjusted Performance

Weakest

Over the last 90 days SemiLEDS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in September 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Lantronix and SemiLEDS

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

The idea behind Lantronix and SemiLEDS 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.