Correlation Between Analog Devices and Nasdaq Benchmark
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By analyzing existing cross correlation between Analog Devices and Nasdaq Benchmark Energy, you can compare the effects of market volatilities on Analog Devices and Nasdaq Benchmark 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 Nasdaq Benchmark. Check out your portfolio center. Please also check ongoing floating volatility patterns of Analog Devices and Nasdaq Benchmark.
Diversification Opportunities for Analog Devices and Nasdaq Benchmark
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Analog and Nasdaq is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Analog Devices and Nasdaq Benchmark Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasdaq Benchmark Energy 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 Nasdaq Benchmark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasdaq Benchmark Energy has no effect on the direction of Analog Devices i.e., Analog Devices and Nasdaq Benchmark go up and down completely randomly.
Pair Corralation between Analog Devices and Nasdaq Benchmark
Considering the 90-day investment horizon Analog Devices is expected to generate 1.73 times more return on investment than Nasdaq Benchmark. However, Analog Devices is 1.73 times more volatile than Nasdaq Benchmark Energy. It trades about 0.06 of its potential returns per unit of risk. Nasdaq Benchmark Energy is currently generating about -0.01 per unit of risk. If you would invest 15,634 in Analog Devices on September 19, 2024 and sell it today you would earn a total of 5,143 from holding Analog Devices or generate 32.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.66% |
| Values | Daily Returns |
Analog Devices vs. Nasdaq Benchmark Energy
Performance |
| Timeline |
Analog Devices and Nasdaq Benchmark Volatility Contrast
Predicted Return Density |
| Returns |
Analog Devices
Pair trading matchups for Analog Devices
Nasdaq Benchmark Energy
Pair trading matchups for Nasdaq Benchmark
Pair Trading with Analog Devices and Nasdaq Benchmark
The main advantage of trading using opposite Analog Devices and Nasdaq Benchmark positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Analog Devices position performs unexpectedly, Nasdaq Benchmark 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 Nasdaq Benchmark will offset losses from the drop in Nasdaq Benchmark's long position.The idea behind Analog Devices and Nasdaq Benchmark Energy 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.| Nasdaq Benchmark vs. JBG SMITH Properties | Nasdaq Benchmark vs. Summit Materials | Nasdaq Benchmark vs. Harmony Gold Mining | Nasdaq Benchmark vs. Analog Devices |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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