Correlation Between Skyworks Solutions and Cohu

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

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

Diversification Opportunities for Skyworks Solutions and Cohu

-0.33

Correlation Coefficient

Skyworks Solutions  Cohu

Very good diversification

The 3 months correlation between Skyworks and Cohu is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Skyworks Solutions and Cohu Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohu Inc and Skyworks Solutions 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 Skyworks Solutions are associated (or correlated) with Cohu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cohu Inc has no effect on the direction of Skyworks Solutions i.e., Skyworks Solutions and Cohu go up and down completely randomly.

Pair Corralation between Skyworks Solutions and Cohu

Given the investment horizon of 90 days Skyworks Solutions is expected to generate 0.91 times more return on investment than Cohu. However, Skyworks Solutions is 1.1 times less risky than Cohu. It trades about 0.0 of its potential returns per unit of risk. Cohu Inc is currently generating about -0.02 per unit of risk. If you would invest  9,589  in Skyworks Solutions on August 31, 2024 and sell it today you would lose (909.00) from holding Skyworks Solutions or give up 9.48% of portfolio value over 90 days.

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

Skyworks Solutions  vs.  Cohu Inc

Skyworks Solutions

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Skyworks Solutions 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 forward-looking signals remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Cohu Inc

Risk-Adjusted Performance

2 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cohu Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical indicators, Cohu is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Skyworks Solutions and Cohu

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

The idea behind Skyworks Solutions and Cohu Inc 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.