Correlation Between MACOM Technology and Wenzhou Kangning
Can any of the company-specific risk be diversified away by investing in both MACOM Technology and Wenzhou Kangning 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 Wenzhou Kangning 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 Wenzhou Kangning Hospital, you can compare the effects of market volatilities on MACOM Technology and Wenzhou Kangning 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 Wenzhou Kangning. Check out your portfolio center. Please also check ongoing floating volatility patterns of MACOM Technology and Wenzhou Kangning.
Diversification Opportunities for MACOM Technology and Wenzhou Kangning
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MACOM and Wenzhou is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding MACOM Technology Solutions and Wenzhou Kangning Hospital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wenzhou Kangning Hospital 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 Wenzhou Kangning. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wenzhou Kangning Hospital has no effect on the direction of MACOM Technology i.e., MACOM Technology and Wenzhou Kangning go up and down completely randomly.
Pair Corralation between MACOM Technology and Wenzhou Kangning
Assuming the 90 days horizon MACOM Technology Solutions is expected to generate 0.79 times more return on investment than Wenzhou Kangning. However, MACOM Technology Solutions is 1.26 times less risky than Wenzhou Kangning. It trades about -0.03 of its potential returns per unit of risk. Wenzhou Kangning Hospital is currently generating about -0.24 per unit of risk. If you would invest 13,400 in MACOM Technology Solutions on October 16, 2024 and sell it today you would lose (200.00) from holding MACOM Technology Solutions or give up 1.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MACOM Technology Solutions vs. Wenzhou Kangning Hospital
Performance |
| Timeline |
| MACOM Technology Sol |
| Wenzhou Kangning Hospital |
MACOM Technology and Wenzhou Kangning Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MACOM Technology and Wenzhou Kangning
The main advantage of trading using opposite MACOM Technology and Wenzhou Kangning positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MACOM Technology position performs unexpectedly, Wenzhou Kangning 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 Wenzhou Kangning will offset losses from the drop in Wenzhou Kangning's long position.| MACOM Technology vs. SCANDMEDICAL SOLDK 040 | MACOM Technology vs. Peijia Medical Limited | MACOM Technology vs. CREO MEDICAL GRP | MACOM Technology vs. Aya Gold Silver |
| Wenzhou Kangning vs. Vishay Intertechnology | Wenzhou Kangning vs. Pembina Pipeline Corp | Wenzhou Kangning vs. MACOM Technology Solutions | Wenzhou Kangning vs. PKSHA TECHNOLOGY INC |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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