Correlation Between MACOM Technology and SPARTAN STORES
Can any of the company-specific risk be diversified away by investing in both MACOM Technology and SPARTAN STORES 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 SPARTAN STORES 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 SPARTAN STORES, you can compare the effects of market volatilities on MACOM Technology and SPARTAN STORES 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 SPARTAN STORES. Check out your portfolio center. Please also check ongoing floating volatility patterns of MACOM Technology and SPARTAN STORES.
Diversification Opportunities for MACOM Technology and SPARTAN STORES
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MACOM and SPARTAN is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding MACOM Technology Solutions and SPARTAN STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPARTAN STORES 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 SPARTAN STORES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPARTAN STORES has no effect on the direction of MACOM Technology i.e., MACOM Technology and SPARTAN STORES go up and down completely randomly.
Pair Corralation between MACOM Technology and SPARTAN STORES
Assuming the 90 days horizon MACOM Technology Solutions is expected to generate 1.23 times more return on investment than SPARTAN STORES. However, MACOM Technology is 1.23 times more volatile than SPARTAN STORES. It trades about -0.15 of its potential returns per unit of risk. SPARTAN STORES is currently generating about -0.32 per unit of risk. If you would invest 13,400 in MACOM Technology Solutions on October 16, 2024 and sell it today you would lose (700.00) from holding MACOM Technology Solutions or give up 5.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MACOM Technology Solutions vs. SPARTAN STORES
Performance |
| Timeline |
| MACOM Technology Sol |
| SPARTAN STORES |
MACOM Technology and SPARTAN STORES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MACOM Technology and SPARTAN STORES
The main advantage of trading using opposite MACOM Technology and SPARTAN STORES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MACOM Technology position performs unexpectedly, SPARTAN STORES 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 SPARTAN STORES will offset losses from the drop in SPARTAN STORES's long position.| MACOM Technology vs. SCANDMEDICAL SOLDK 040 | MACOM Technology vs. Peijia Medical Limited | MACOM Technology vs. CREO MEDICAL GRP | MACOM Technology vs. Aya Gold Silver |
| SPARTAN STORES vs. Easy Software AG | SPARTAN STORES vs. Firan Technology Group | SPARTAN STORES vs. Salesforce | SPARTAN STORES vs. PKSHA TECHNOLOGY INC |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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