Correlation Between Neinor Homes and MACOM Technology
Can any of the company-specific risk be diversified away by investing in both Neinor Homes and MACOM Technology 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 Neinor Homes and MACOM Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neinor Homes SA and MACOM Technology Solutions, you can compare the effects of market volatilities on Neinor Homes and MACOM Technology 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 Neinor Homes with a short position of MACOM Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neinor Homes and MACOM Technology.
Diversification Opportunities for Neinor Homes and MACOM Technology
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Neinor and MACOM is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Neinor Homes SA and MACOM Technology Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MACOM Technology Sol and Neinor Homes 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 Neinor Homes SA are associated (or correlated) with MACOM Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MACOM Technology Sol has no effect on the direction of Neinor Homes i.e., Neinor Homes and MACOM Technology go up and down completely randomly.
Pair Corralation between Neinor Homes and MACOM Technology
Assuming the 90 days trading horizon Neinor Homes SA is expected to generate 0.49 times more return on investment than MACOM Technology. However, Neinor Homes SA is 2.05 times less risky than MACOM Technology. It trades about -0.47 of its potential returns per unit of risk. MACOM Technology Solutions is currently generating about -0.33 per unit of risk. If you would invest 1,682 in Neinor Homes SA on December 1, 2024 and sell it today you would lose (160.00) from holding Neinor Homes SA or give up 9.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Neinor Homes SA vs. MACOM Technology Solutions
Performance |
| Timeline |
| Neinor Homes SA |
| MACOM Technology Sol |
Neinor Homes and MACOM Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neinor Homes and MACOM Technology
The main advantage of trading using opposite Neinor Homes and MACOM Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neinor Homes position performs unexpectedly, MACOM Technology 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 MACOM Technology will offset losses from the drop in MACOM Technology's long position.| Neinor Homes vs. GALENA MINING LTD | Neinor Homes vs. Carsales | Neinor Homes vs. MCEWEN MINING INC | Neinor Homes vs. RYU Apparel |
| MACOM Technology vs. Flutter Entertainment PLC | MACOM Technology vs. Singapore Telecommunications Limited | MACOM Technology vs. Verizon Communications | MACOM Technology vs. Universal Entertainment |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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