Correlation Between MaxLinear and SemiLEDS

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

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

Diversification Opportunities for MaxLinear and SemiLEDS

-0.57

Correlation Coefficient

MaxLinear  SemiLEDS

Excellent diversification

The 3 months correlation between MaxLinear and SemiLEDS is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding MaxLinear and SemiLEDS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SemiLEDS and MaxLinear 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 MaxLinear 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 MaxLinear i.e., MaxLinear and SemiLEDS go up and down completely randomly.

Pair Corralation between MaxLinear and SemiLEDS

Considering the 90-day investment horizon MaxLinear is expected to generate 0.57 times more return on investment than SemiLEDS. However, MaxLinear is 1.74 times less risky than SemiLEDS. It trades about 0.1 of its potential returns per unit of risk. SemiLEDS is currently generating about -0.04 per unit of risk. If you would invest  1,283  in MaxLinear on May 13, 2025 and sell it today you would earn a total of  224.00  from holding MaxLinear or generate 17.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

MaxLinear  vs.  SemiLEDS

MaxLinear

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in MaxLinear are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating basic indicators, MaxLinear disclosed 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 MaxLinear and SemiLEDS

The main advantage of trading using opposite MaxLinear and SemiLEDS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MaxLinear 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 MaxLinear 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.