Correlation Between MACOM Technology and Gaztransport Technigaz
Can any of the company-specific risk be diversified away by investing in both MACOM Technology and Gaztransport Technigaz 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 Gaztransport Technigaz 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 Gaztransport Technigaz SA, you can compare the effects of market volatilities on MACOM Technology and Gaztransport Technigaz 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 Gaztransport Technigaz. Check out your portfolio center. Please also check ongoing floating volatility patterns of MACOM Technology and Gaztransport Technigaz.
Diversification Opportunities for MACOM Technology and Gaztransport Technigaz
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MACOM and Gaztransport is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding MACOM Technology Solutions and Gaztransport Technigaz SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport Technigaz 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 Gaztransport Technigaz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaztransport Technigaz has no effect on the direction of MACOM Technology i.e., MACOM Technology and Gaztransport Technigaz go up and down completely randomly.
Pair Corralation between MACOM Technology and Gaztransport Technigaz
Assuming the 90 days horizon MACOM Technology Solutions is expected to generate 1.38 times more return on investment than Gaztransport Technigaz. However, MACOM Technology is 1.38 times more volatile than Gaztransport Technigaz SA. It trades about 0.09 of its potential returns per unit of risk. Gaztransport Technigaz SA is currently generating about 0.05 per unit of risk. If you would invest 7,800 in MACOM Technology Solutions on August 29, 2024 and sell it today you would earn a total of 4,900 from holding MACOM Technology Solutions or generate 62.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.6% |
| Values | Daily Returns |
MACOM Technology Solutions vs. Gaztransport Technigaz SA
Performance |
| Timeline |
| MACOM Technology Sol |
| Gaztransport Technigaz |
MACOM Technology and Gaztransport Technigaz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MACOM Technology and Gaztransport Technigaz
The main advantage of trading using opposite MACOM Technology and Gaztransport Technigaz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MACOM Technology position performs unexpectedly, Gaztransport Technigaz 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 Gaztransport Technigaz will offset losses from the drop in Gaztransport Technigaz's long position.| MACOM Technology vs. Choice Hotels International | MACOM Technology vs. Xenia Hotels Resorts | MACOM Technology vs. Pebblebrook Hotel Trust | MACOM Technology vs. Playa Hotels Resorts |
| Gaztransport Technigaz vs. NOV Inc | Gaztransport Technigaz vs. Superior Plus Corp | Gaztransport Technigaz vs. NMI Holdings | Gaztransport Technigaz vs. SIVERS SEMICONDUCTORS AB |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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