Correlation Between Super Micro and Advanced Micro

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

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

Diversification Opportunities for Super Micro and Advanced Micro

0.04

Correlation Coefficient

Super Micro  Advanced Micro

Significant diversification

The 3 months correlation between Super and Advanced is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Super Micro Computer, and Advanced Micro Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Micro Devices and Super Micro 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 Super Micro Computer, are associated (or correlated) with Advanced Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Micro Devices has no effect on the direction of Super Micro i.e., Super Micro and Advanced Micro go up and down completely randomly.

Pair Corralation between Super Micro and Advanced Micro

Assuming the 90 days trading horizon Super Micro Computer, is expected to under-perform the Advanced Micro. But the stock apears to be less risky and, when comparing its historical volatility, Super Micro Computer, is 1.19 times less risky than Advanced Micro. The stock trades about -0.04 of its potential returns per unit of risk. The Advanced Micro Devices is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  2,815  in Advanced Micro Devices on September 7, 2025 and sell it today you would earn a total of  1,200  from holding Advanced Micro Devices or generate 42.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Super Micro Computer,  vs.  Advanced Micro Devices

Super Micro Computer,

Risk-Adjusted Performance

Weakest

Over the last 90 days Super Micro Computer, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Advanced Micro Devices

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Advanced Micro Devices are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Advanced Micro displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Super Micro and Advanced Micro

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

The idea behind Super Micro Computer, and Advanced Micro 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 Stocks Directory module to find actively traded stocks across global markets.