Correlation Between MACOM Technology and POLENERGIA
Can any of the company-specific risk be diversified away by investing in both MACOM Technology and POLENERGIA 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 MACOM Technology and POLENERGIA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MACOM Technology Solutions and POLENERGIA SA ZY, you can compare the effects of market volatilities on MACOM Technology and POLENERGIA 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 MACOM Technology with a short position of POLENERGIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of MACOM Technology and POLENERGIA.
Diversification Opportunities for MACOM Technology and POLENERGIA
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between MACOM and POLENERGIA is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding MACOM Technology Solutions and POLENERGIA SA ZY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on POLENERGIA SA ZY and MACOM Technology 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 MACOM Technology Solutions are associated (or correlated) with POLENERGIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of POLENERGIA SA ZY has no effect on the direction of MACOM Technology i.e., MACOM Technology and POLENERGIA go up and down completely randomly.
Pair Corralation between MACOM Technology and POLENERGIA
Assuming the 90 days horizon MACOM Technology Solutions is expected to generate 1.2 times more return on investment than POLENERGIA. However, MACOM Technology is 1.2 times more volatile than POLENERGIA SA ZY. It trades about 0.08 of its potential returns per unit of risk. POLENERGIA SA ZY is currently generating about -0.01 per unit of risk. If you would invest 8,500 in MACOM Technology Solutions on September 14, 2024 and sell it today you would earn a total of 4,600 from holding MACOM Technology Solutions or generate 54.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
MACOM Technology Solutions vs. POLENERGIA SA ZY
Performance |
| Timeline |
| MACOM Technology Sol |
| POLENERGIA SA ZY |
MACOM Technology and POLENERGIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MACOM Technology and POLENERGIA
The main advantage of trading using opposite MACOM Technology and POLENERGIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MACOM Technology position performs unexpectedly, POLENERGIA 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 POLENERGIA will offset losses from the drop in POLENERGIA's long position.| MACOM Technology vs. Taiwan Semiconductor Manufacturing | MACOM Technology vs. Broadcom | MACOM Technology vs. Superior Plus Corp | MACOM Technology vs. SIVERS SEMICONDUCTORS AB |
| POLENERGIA vs. CN YANGTPWR GDR | POLENERGIA vs. SIEMENS ENERGY AG | POLENERGIA vs. Siemens Energy AG | POLENERGIA vs. Vistra Corp |
Check out your portfolio center.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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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