Correlation Between MACOM Technology and Firan Technology
Can any of the company-specific risk be diversified away by investing in both MACOM Technology and Firan Technology 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 Firan Technology 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 Firan Technology Group, you can compare the effects of market volatilities on MACOM Technology and Firan Technology 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 Firan Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of MACOM Technology and Firan Technology.
Diversification Opportunities for MACOM Technology and Firan Technology
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MACOM and Firan is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding MACOM Technology Solutions and Firan Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firan Technology 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 Firan Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Firan Technology has no effect on the direction of MACOM Technology i.e., MACOM Technology and Firan Technology go up and down completely randomly.
Pair Corralation between MACOM Technology and Firan Technology
Assuming the 90 days horizon MACOM Technology Solutions is expected to generate 1.64 times more return on investment than Firan Technology. However, MACOM Technology is 1.64 times more volatile than Firan Technology Group. It trades about 0.01 of its potential returns per unit of risk. Firan Technology Group is currently generating about -0.05 per unit of risk. If you would invest 13,100 in MACOM Technology Solutions on October 12, 2024 and sell it today you would earn a total of 0.00 from holding MACOM Technology Solutions or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MACOM Technology Solutions vs. Firan Technology Group
Performance |
| Timeline |
| MACOM Technology Sol |
| Firan Technology |
MACOM Technology and Firan Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MACOM Technology and Firan Technology
The main advantage of trading using opposite MACOM Technology and Firan Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MACOM Technology position performs unexpectedly, Firan Technology 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 Firan Technology will offset losses from the drop in Firan Technology's long position.| MACOM Technology vs. Aya Gold Silver | MACOM Technology vs. Merit Medical Systems | MACOM Technology vs. Peijia Medical Limited | MACOM Technology vs. MEDICAL FACILITIES NEW |
| Firan Technology vs. MICRONIC MYDATA | Firan Technology vs. NTT DATA | Firan Technology vs. MPH Health Care | Firan Technology vs. China Datang |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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