Correlation Between Power Integrations and Semtech

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

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

Diversification Opportunities for Power Integrations and Semtech

-0.77

Correlation Coefficient

Power Integrations  Semtech

Pay attention - limited upside

The 3 months correlation between Power and Semtech is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Power Integrations and Semtech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semtech and Power Integrations 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 Power Integrations are associated (or correlated) with Semtech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semtech has no effect on the direction of Power Integrations i.e., Power Integrations and Semtech go up and down completely randomly.

Pair Corralation between Power Integrations and Semtech

Given the investment horizon of 90 days Power Integrations is expected to under-perform the Semtech. But the stock apears to be less risky and, when comparing its historical volatility, Power Integrations is 1.45 times less risky than Semtech. The stock trades about -0.28 of its potential returns per unit of risk. The Semtech is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  4,693  in Semtech on July 12, 2025 and sell it today you would earn a total of  1,833  from holding Semtech or generate 39.06% return on investment over 90 days.

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

Power Integrations  vs.  Semtech

Power Integrations

Risk-Adjusted Performance

Weakest

Over the last 90 days Power Integrations has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in November 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Semtech

Risk-Adjusted Performance

Good

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

Pair Trading with Power Integrations and Semtech

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

The idea behind Power Integrations and Semtech 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .