Correlation Between Apple and Marvell Technology
Can any of the company-specific risk be diversified away by investing in both Apple and Marvell 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 Apple and Marvell Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Marvell Technology, you can compare the effects of market volatilities on Apple and Marvell 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 Apple with a short position of Marvell Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Marvell Technology.
Diversification Opportunities for Apple and Marvell Technology
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Apple and Marvell is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Marvell Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marvell Technology and Apple 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 Apple Inc are associated (or correlated) with Marvell Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marvell Technology has no effect on the direction of Apple i.e., Apple and Marvell Technology go up and down completely randomly.
Pair Corralation between Apple and Marvell Technology
Assuming the 90 days trading horizon Apple is expected to generate 1.15 times less return on investment than Marvell Technology. But when comparing it to its historical volatility, Apple Inc is 2.1 times less risky than Marvell Technology. It trades about 0.51 of its potential returns per unit of risk. Marvell Technology is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 4,920 in Marvell Technology on September 3, 2024 and sell it today you would earn a total of 585.00 from holding Marvell Technology or generate 11.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. Marvell Technology
Performance |
| Timeline |
| Apple Inc |
| Marvell Technology |
Apple and Marvell Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Marvell Technology
The main advantage of trading using opposite Apple and Marvell Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Marvell 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 Marvell Technology will offset losses from the drop in Marvell Technology's long position.The idea behind Apple Inc and Marvell Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Marvell Technology vs. Taiwan Semiconductor Manufacturing | Marvell Technology vs. Apple Inc | Marvell Technology vs. Alibaba Group Holding | Marvell Technology vs. Microsoft |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Stocks Directory Find actively traded stocks across global markets | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |