Correlation Between MACOM Technology and Grupo Aval
Can any of the company-specific risk be diversified away by investing in both MACOM Technology and Grupo Aval 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 Grupo Aval 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 Grupo Aval Acciones, you can compare the effects of market volatilities on MACOM Technology and Grupo Aval 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 Grupo Aval. Check out your portfolio center. Please also check ongoing floating volatility patterns of MACOM Technology and Grupo Aval.
Diversification Opportunities for MACOM Technology and Grupo Aval
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MACOM and Grupo is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding MACOM Technology Solutions and Grupo Aval Acciones in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Aval Acciones 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 Grupo Aval. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Aval Acciones has no effect on the direction of MACOM Technology i.e., MACOM Technology and Grupo Aval go up and down completely randomly.
Pair Corralation between MACOM Technology and Grupo Aval
Assuming the 90 days horizon MACOM Technology Solutions is expected to generate 2.58 times more return on investment than Grupo Aval. However, MACOM Technology is 2.58 times more volatile than Grupo Aval Acciones. It trades about 0.15 of its potential returns per unit of risk. Grupo Aval Acciones is currently generating about 0.25 per unit of risk. If you would invest 11,000 in MACOM Technology Solutions on August 30, 2024 and sell it today you would earn a total of 1,400 from holding MACOM Technology Solutions or generate 12.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
MACOM Technology Solutions vs. Grupo Aval Acciones
Performance |
| Timeline |
| MACOM Technology Sol |
| Grupo Aval Acciones |
MACOM Technology and Grupo Aval Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MACOM Technology and Grupo Aval
The main advantage of trading using opposite MACOM Technology and Grupo Aval positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MACOM Technology position performs unexpectedly, Grupo Aval 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 Grupo Aval will offset losses from the drop in Grupo Aval's long position.| MACOM Technology vs. Texas Instruments Incorporated | MACOM Technology vs. Advanced Micro Devices | MACOM Technology vs. Advanced Micro Devices | MACOM Technology vs. Intel |
| Grupo Aval vs. ETFS Coffee ETC | Grupo Aval vs. FANDIFI TECHNOLOGY P | Grupo Aval vs. MACOM Technology Solutions | Grupo Aval vs. Computer And Technologies |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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