Correlation Between Silicon Laboratories and Lattice Semiconductor

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

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

Diversification Opportunities for Silicon Laboratories and Lattice Semiconductor

0.05

Correlation Coefficient

Silicon Laboratories  Lattice Semiconductor

Significant diversification

The 3 months correlation between Silicon and Lattice is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Silicon Laboratories and Lattice Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lattice Semiconductor and Silicon Laboratories 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 Silicon Laboratories are associated (or correlated) with Lattice Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lattice Semiconductor has no effect on the direction of Silicon Laboratories i.e., Silicon Laboratories and Lattice Semiconductor go up and down completely randomly.

Pair Corralation between Silicon Laboratories and Lattice Semiconductor

Given the investment horizon of 90 days Silicon Laboratories is expected to generate 6.16 times less return on investment than Lattice Semiconductor. But when comparing it to its historical volatility, Silicon Laboratories is 1.27 times less risky than Lattice Semiconductor. It trades about 0.03 of its potential returns per unit of risk. Lattice Semiconductor is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  5,046  in Lattice Semiconductor on May 19, 2025 and sell it today you would earn a total of  1,307  from holding Lattice Semiconductor or generate 25.9% return on investment over 90 days.

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

Silicon Laboratories  vs.  Lattice Semiconductor

Silicon Laboratories

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Silicon Laboratories are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Silicon Laboratories is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Lattice Semiconductor

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Lattice Semiconductor are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Lattice Semiconductor exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Silicon Laboratories and Lattice Semiconductor

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

The idea behind Silicon Laboratories and Lattice Semiconductor 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.