Correlation Between Advanced Micro and United Parks
Can any of the company-specific risk be diversified away by investing in both Advanced Micro and United Parks 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 Advanced Micro and United Parks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Micro Devices and United Parks Resorts, you can compare the effects of market volatilities on Advanced Micro and United Parks 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 Advanced Micro with a short position of United Parks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Micro and United Parks.
Diversification Opportunities for Advanced Micro and United Parks
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Advanced and United is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Micro Devices and United Parks Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Parks Resorts and Advanced Micro 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 Advanced Micro Devices are associated (or correlated) with United Parks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Parks Resorts has no effect on the direction of Advanced Micro i.e., Advanced Micro and United Parks go up and down completely randomly.
Pair Corralation between Advanced Micro and United Parks
Considering the 90-day investment horizon Advanced Micro Devices is expected to under-perform the United Parks. In addition to that, Advanced Micro is 1.33 times more volatile than United Parks Resorts. It trades about -0.18 of its total potential returns per unit of risk. United Parks Resorts is currently generating about 0.08 per unit of volatility. If you would invest 5,465 in United Parks Resorts on August 28, 2024 and sell it today you would earn a total of 197.00 from holding United Parks Resorts or generate 3.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Micro Devices vs. United Parks Resorts
Performance |
| Timeline |
| Advanced Micro Devices |
| United Parks Resorts |
Advanced Micro and United Parks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Micro and United Parks
The main advantage of trading using opposite Advanced Micro and United Parks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Micro position performs unexpectedly, United Parks 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 United Parks will offset losses from the drop in United Parks' long position.| Advanced Micro vs. Taiwan Semiconductor Manufacturing | Advanced Micro vs. Intel | Advanced Micro vs. Marvell Technology Group | Advanced Micro vs. Micron Technology |
| United Parks vs. Nordic Semiconductor ASA | United Parks vs. Omni Health | United Parks vs. Advanced Micro Devices | United Parks vs. MACOM Technology Solutions |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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