Correlation Between Qualcomm Incorporated and Analog Devices

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

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

Diversification Opportunities for Qualcomm Incorporated and Analog Devices

0.86

Correlation Coefficient

Qualcomm Incorporated  Analog Devices

Very poor diversification

The 3 months correlation between Qualcomm and Analog is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Qualcomm Incorporated and Analog Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Analog Devices and Qualcomm Incorporated 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 Qualcomm Incorporated are associated (or correlated) with Analog Devices. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Analog Devices has no effect on the direction of Qualcomm Incorporated i.e., Qualcomm Incorporated and Analog Devices go up and down completely randomly.

Pair Corralation between Qualcomm Incorporated and Analog Devices

Given the investment horizon of 90 days Qualcomm Incorporated is expected to generate 2.11 times less return on investment than Analog Devices. In addition to that, Qualcomm Incorporated is 1.02 times more volatile than Analog Devices. It trades about 0.06 of its total potential returns per unit of risk. Analog Devices is currently generating about 0.13 per unit of volatility. If you would invest  19,682  in Analog Devices on May 3, 2025 and sell it today you would earn a total of  2,781  from holding Analog Devices or generate 14.13% return on investment over 90 days.

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

Qualcomm Incorporated  vs.  Analog Devices

Qualcomm Incorporated

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Qualcomm Incorporated are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Qualcomm Incorporated may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Analog Devices

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Analog Devices are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent fundamental indicators, Analog Devices demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Qualcomm Incorporated and Analog Devices

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

The idea behind Qualcomm Incorporated and Analog Devices 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.