Correlation Between MACOM Technology and KONTIGO CARE
Can any of the company-specific risk be diversified away by investing in both MACOM Technology and KONTIGO CARE 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 KONTIGO CARE 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 KONTIGO CARE AB, you can compare the effects of market volatilities on MACOM Technology and KONTIGO CARE 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 KONTIGO CARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of MACOM Technology and KONTIGO CARE.
Diversification Opportunities for MACOM Technology and KONTIGO CARE
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between MACOM and KONTIGO is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding MACOM Technology Solutions and KONTIGO CARE AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KONTIGO CARE AB 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 KONTIGO CARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KONTIGO CARE AB has no effect on the direction of MACOM Technology i.e., MACOM Technology and KONTIGO CARE go up and down completely randomly.
Pair Corralation between MACOM Technology and KONTIGO CARE
Assuming the 90 days horizon MACOM Technology is expected to generate 1.68 times less return on investment than KONTIGO CARE. But when comparing it to its historical volatility, MACOM Technology Solutions is 4.11 times less risky than KONTIGO CARE. It trades about 0.16 of its potential returns per unit of risk. KONTIGO CARE AB is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 21.00 in KONTIGO CARE AB on September 14, 2024 and sell it today you would earn a total of 1.00 from holding KONTIGO CARE AB or generate 4.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MACOM Technology Solutions vs. KONTIGO CARE AB
Performance |
| Timeline |
| MACOM Technology Sol |
| KONTIGO CARE AB |
MACOM Technology and KONTIGO CARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MACOM Technology and KONTIGO CARE
The main advantage of trading using opposite MACOM Technology and KONTIGO CARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MACOM Technology position performs unexpectedly, KONTIGO CARE 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 KONTIGO CARE will offset losses from the drop in KONTIGO CARE'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 |
| KONTIGO CARE vs. INTERCONT HOTELS | KONTIGO CARE vs. AECOM TECHNOLOGY | KONTIGO CARE vs. MACOM Technology Solutions | KONTIGO CARE vs. SCOTT TECHNOLOGY |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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