Correlation Between MACOM Technology and LIFEWAY FOODS
Can any of the company-specific risk be diversified away by investing in both MACOM Technology and LIFEWAY FOODS 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 LIFEWAY FOODS 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 LIFEWAY FOODS, you can compare the effects of market volatilities on MACOM Technology and LIFEWAY FOODS 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 LIFEWAY FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of MACOM Technology and LIFEWAY FOODS.
Diversification Opportunities for MACOM Technology and LIFEWAY FOODS
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MACOM and LIFEWAY is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding MACOM Technology Solutions and LIFEWAY FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LIFEWAY FOODS 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 LIFEWAY FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LIFEWAY FOODS has no effect on the direction of MACOM Technology i.e., MACOM Technology and LIFEWAY FOODS go up and down completely randomly.
Pair Corralation between MACOM Technology and LIFEWAY FOODS
Assuming the 90 days horizon MACOM Technology is expected to generate 2.55 times less return on investment than LIFEWAY FOODS. But when comparing it to its historical volatility, MACOM Technology Solutions is 2.51 times less risky than LIFEWAY FOODS. It trades about 0.07 of its potential returns per unit of risk. LIFEWAY FOODS is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 595.00 in LIFEWAY FOODS on August 28, 2024 and sell it today you would earn a total of 1,645 from holding LIFEWAY FOODS or generate 276.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MACOM Technology Solutions vs. LIFEWAY FOODS
Performance |
| Timeline |
| MACOM Technology Sol |
| LIFEWAY FOODS |
MACOM Technology and LIFEWAY FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MACOM Technology and LIFEWAY FOODS
The main advantage of trading using opposite MACOM Technology and LIFEWAY FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MACOM Technology position performs unexpectedly, LIFEWAY FOODS 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 LIFEWAY FOODS will offset losses from the drop in LIFEWAY FOODS's long position.| MACOM Technology vs. Astral Foods Limited | MACOM Technology vs. TYSON FOODS A | MACOM Technology vs. AUSNUTRIA DAIRY | MACOM Technology vs. EMBARK EDUCATION LTD |
| LIFEWAY FOODS vs. Microchip Technology Incorporated | LIFEWAY FOODS vs. DXC Technology Co | LIFEWAY FOODS vs. CapitaLand Investment Limited | LIFEWAY FOODS vs. MGIC 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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