Correlation Between MACOM Technology and SIERRA METALS
Can any of the company-specific risk be diversified away by investing in both MACOM Technology and SIERRA METALS 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 SIERRA METALS 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 SIERRA METALS, you can compare the effects of market volatilities on MACOM Technology and SIERRA METALS 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 SIERRA METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of MACOM Technology and SIERRA METALS.
Diversification Opportunities for MACOM Technology and SIERRA METALS
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between MACOM and SIERRA is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding MACOM Technology Solutions and SIERRA METALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIERRA METALS 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 SIERRA METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIERRA METALS has no effect on the direction of MACOM Technology i.e., MACOM Technology and SIERRA METALS go up and down completely randomly.
Pair Corralation between MACOM Technology and SIERRA METALS
Assuming the 90 days horizon MACOM Technology Solutions is expected to generate 1.01 times more return on investment than SIERRA METALS. However, MACOM Technology is 1.01 times more volatile than SIERRA METALS. It trades about 0.21 of its potential returns per unit of risk. SIERRA METALS is currently generating about 0.2 per unit of risk. If you would invest 12,700 in MACOM Technology Solutions on October 27, 2024 and sell it today you would earn a total of 1,000.00 from holding MACOM Technology Solutions or generate 7.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MACOM Technology Solutions vs. SIERRA METALS
Performance |
| Timeline |
| MACOM Technology Sol |
| SIERRA METALS |
MACOM Technology and SIERRA METALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MACOM Technology and SIERRA METALS
The main advantage of trading using opposite MACOM Technology and SIERRA METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MACOM Technology position performs unexpectedly, SIERRA METALS 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 SIERRA METALS will offset losses from the drop in SIERRA METALS's long position.| MACOM Technology vs. Perseus Mining Limited | MACOM Technology vs. REINET INVESTMENTS SCA | MACOM Technology vs. GALENA MINING LTD | MACOM Technology vs. New Residential Investment |
| SIERRA METALS vs. Chuangs China Investments | SIERRA METALS vs. Keck Seng Investments | SIERRA METALS vs. GWILLI FOOD | SIERRA METALS vs. PennantPark Investment |
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 Stocks Directory module to find actively traded stocks across global markets.
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