Correlation Between MACOM Technology and Thermo Fisher
Can any of the company-specific risk be diversified away by investing in both MACOM Technology and Thermo Fisher 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 Thermo Fisher 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 Thermo Fisher Scientific, you can compare the effects of market volatilities on MACOM Technology and Thermo Fisher 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 Thermo Fisher. Check out your portfolio center. Please also check ongoing floating volatility patterns of MACOM Technology and Thermo Fisher.
Diversification Opportunities for MACOM Technology and Thermo Fisher
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MACOM and Thermo is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding MACOM Technology Solutions and Thermo Fisher Scientific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thermo Fisher Scientific 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 Thermo Fisher. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thermo Fisher Scientific has no effect on the direction of MACOM Technology i.e., MACOM Technology and Thermo Fisher go up and down completely randomly.
Pair Corralation between MACOM Technology and Thermo Fisher
Assuming the 90 days horizon MACOM Technology Solutions is expected to generate 2.09 times more return on investment than Thermo Fisher. However, MACOM Technology is 2.09 times more volatile than Thermo Fisher Scientific. It trades about 0.29 of its potential returns per unit of risk. Thermo Fisher Scientific is currently generating about -0.02 per unit of risk. If you would invest 10,400 in MACOM Technology Solutions on September 4, 2024 and sell it today you would earn a total of 2,600 from holding MACOM Technology Solutions or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
MACOM Technology Solutions vs. Thermo Fisher Scientific
Performance |
| Timeline |
| MACOM Technology Sol |
| Thermo Fisher Scientific |
MACOM Technology and Thermo Fisher Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MACOM Technology and Thermo Fisher
The main advantage of trading using opposite MACOM Technology and Thermo Fisher positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MACOM Technology position performs unexpectedly, Thermo Fisher 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 Thermo Fisher will offset losses from the drop in Thermo Fisher's long position.| MACOM Technology vs. NVIDIA | MACOM Technology vs. Taiwan Semiconductor Manufacturing | MACOM Technology vs. Advanced Micro Devices | MACOM Technology vs. Intel |
| Thermo Fisher vs. Sunstone Hotel Investors | Thermo Fisher vs. INTERCONT HOTELS | Thermo Fisher vs. GameStop Corp | Thermo Fisher vs. DALATA HOTEL |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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