Correlation Between MACOM Technology and Far East
Can any of the company-specific risk be diversified away by investing in both MACOM Technology and Far East 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 Far East 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 Far East Horizon, you can compare the effects of market volatilities on MACOM Technology and Far East 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 Far East. Check out your portfolio center. Please also check ongoing floating volatility patterns of MACOM Technology and Far East.
Diversification Opportunities for MACOM Technology and Far East
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MACOM and Far is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding MACOM Technology Solutions and Far East Horizon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Far East Horizon 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 Far East. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Far East Horizon has no effect on the direction of MACOM Technology i.e., MACOM Technology and Far East go up and down completely randomly.
Pair Corralation between MACOM Technology and Far East
Assuming the 90 days horizon MACOM Technology Solutions is expected to under-perform the Far East. In addition to that, MACOM Technology is 1.9 times more volatile than Far East Horizon. It trades about -0.11 of its total potential returns per unit of risk. Far East Horizon is currently generating about 0.1 per unit of volatility. If you would invest 62.00 in Far East Horizon on October 15, 2024 and sell it today you would earn a total of 1.00 from holding Far East Horizon or generate 1.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MACOM Technology Solutions vs. Far East Horizon
Performance |
| Timeline |
| MACOM Technology Sol |
| Far East Horizon |
MACOM Technology and Far East Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MACOM Technology and Far East
The main advantage of trading using opposite MACOM Technology and Far East positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MACOM Technology position performs unexpectedly, Far East 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 Far East will offset losses from the drop in Far East's long position.| MACOM Technology vs. Alfa Financial Software | MACOM Technology vs. PSI Software AG | MACOM Technology vs. Kingdee International Software | MACOM Technology vs. YATRA ONLINE DL 0001 |
| Far East vs. ALBIS LEASING AG | Far East vs. Firan Technology Group | Far East vs. MACOM Technology Solutions | Far East vs. FUYO GENERAL LEASE |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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