Correlation Between Monolithic Power and Exchange Traded

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

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

Diversification Opportunities for Monolithic Power and Exchange Traded

0.62

Correlation Coefficient

Monolithic Power  Exchange Traded

Poor diversification

The 3 months correlation between Monolithic and Exchange is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Monolithic Power Systems and Exchange Traded Concepts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exchange Traded Concepts and Monolithic Power 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 Monolithic Power Systems are associated (or correlated) with Exchange Traded. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exchange Traded Concepts has no effect on the direction of Monolithic Power i.e., Monolithic Power and Exchange Traded go up and down completely randomly.

Pair Corralation between Monolithic Power and Exchange Traded

Given the investment horizon of 90 days Monolithic Power Systems is expected to generate 3.26 times more return on investment than Exchange Traded. However, Monolithic Power is 3.26 times more volatile than Exchange Traded Concepts. It trades about 0.07 of its potential returns per unit of risk. Exchange Traded Concepts is currently generating about 0.03 per unit of risk. If you would invest  84,821  in Monolithic Power Systems on September 15, 2025 and sell it today you would earn a total of  9,830  from holding Monolithic Power Systems or generate 11.59% return on investment over 90 days.

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

Monolithic Power Systems  vs.  Exchange Traded Concepts

Monolithic Power Systems

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Monolithic Power Systems are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, Monolithic Power reported solid returns over the last few months and may actually be approaching a breakup point.

Exchange Traded Concepts

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Exchange Traded Concepts are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental drivers, Exchange Traded is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Monolithic Power and Exchange Traded

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

The idea behind Monolithic Power Systems and Exchange Traded Concepts 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.