Correlation Between MACOM Technology and Airbus SE
Can any of the company-specific risk be diversified away by investing in both MACOM Technology and Airbus SE 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 Airbus SE 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 Airbus SE, you can compare the effects of market volatilities on MACOM Technology and Airbus SE 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 Airbus SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of MACOM Technology and Airbus SE.
Diversification Opportunities for MACOM Technology and Airbus SE
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MACOM and Airbus is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding MACOM Technology Solutions and Airbus SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airbus SE 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 Airbus SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airbus SE has no effect on the direction of MACOM Technology i.e., MACOM Technology and Airbus SE go up and down completely randomly.
Pair Corralation between MACOM Technology and Airbus SE
Assuming the 90 days horizon MACOM Technology Solutions is expected to under-perform the Airbus SE. In addition to that, MACOM Technology is 1.68 times more volatile than Airbus SE. It trades about -0.16 of its total potential returns per unit of risk. Airbus SE is currently generating about 0.04 per unit of volatility. If you would invest 4,060 in Airbus SE on December 27, 2024 and sell it today you would earn a total of 120.00 from holding Airbus SE or generate 2.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MACOM Technology Solutions vs. Airbus SE
Performance |
| Timeline |
| MACOM Technology Sol |
| Airbus SE |
MACOM Technology and Airbus SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MACOM Technology and Airbus SE
The main advantage of trading using opposite MACOM Technology and Airbus SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MACOM Technology position performs unexpectedly, Airbus SE 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 Airbus SE will offset losses from the drop in Airbus SE's long position.| MACOM Technology vs. MAGNUM MINING EXP | MACOM Technology vs. LIFEWAY FOODS | MACOM Technology vs. SENECA FOODS A | MACOM Technology vs. MCEWEN MINING INC |
| Airbus SE vs. Gladstone Investment | Airbus SE vs. PennantPark Investment | Airbus SE vs. Jacquet Metal Service | Airbus SE vs. MEDCAW INVESTMENTS LS 01 |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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