Correlation Between Analog Devices and CGG
Can any of the company-specific risk be diversified away by investing in both Analog Devices and CGG 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 Analog Devices and CGG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Analog Devices and CGG, you can compare the effects of market volatilities on Analog Devices and CGG 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 Analog Devices with a short position of CGG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Analog Devices and CGG.
Diversification Opportunities for Analog Devices and CGG
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Analog and CGG is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Analog Devices and CGG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CGG and Analog Devices 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 Analog Devices are associated (or correlated) with CGG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CGG has no effect on the direction of Analog Devices i.e., Analog Devices and CGG go up and down completely randomly.
Pair Corralation between Analog Devices and CGG
If you would invest 62.00 in CGG on September 4, 2024 and sell it today you would earn a total of 0.00 from holding CGG or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Analog Devices vs. CGG
Performance |
| Timeline |
| Analog Devices |
| CGG |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Analog Devices and CGG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Analog Devices and CGG
The main advantage of trading using opposite Analog Devices and CGG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Analog Devices position performs unexpectedly, CGG 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 CGG will offset losses from the drop in CGG's long position.| Analog Devices vs. NXP Semiconductors NV | Analog Devices vs. Qualcomm Incorporated | Analog Devices vs. Broadcom | Analog Devices vs. Microchip Technology |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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