Correlation Between Beyond Meat and MACOM Technology
Can any of the company-specific risk be diversified away by investing in both Beyond Meat 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 Beyond Meat and MACOM Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beyond Meat and MACOM Technology Solutions, you can compare the effects of market volatilities on Beyond Meat 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 Beyond Meat with a short position of MACOM Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beyond Meat and MACOM Technology.
Diversification Opportunities for Beyond Meat and MACOM Technology
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Beyond and MACOM is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Beyond Meat 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 Beyond Meat 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 Beyond Meat 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 Beyond Meat i.e., Beyond Meat and MACOM Technology go up and down completely randomly.
Pair Corralation between Beyond Meat and MACOM Technology
Given the investment horizon of 90 days Beyond Meat is expected to under-perform the MACOM Technology. In addition to that, Beyond Meat is 1.18 times more volatile than MACOM Technology Solutions. It trades about -0.04 of its total potential returns per unit of risk. MACOM Technology Solutions is currently generating about 0.14 per unit of volatility. If you would invest 10,548 in MACOM Technology Solutions on August 28, 2024 and sell it today you would earn a total of 2,916 from holding MACOM Technology Solutions or generate 27.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beyond Meat vs. MACOM Technology Solutions
Performance |
| Timeline |
| Beyond Meat |
| MACOM Technology Sol |
Beyond Meat and MACOM Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beyond Meat and MACOM Technology
The main advantage of trading using opposite Beyond Meat and MACOM Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beyond Meat 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.| Beyond Meat vs. Kraft Heinz Co | Beyond Meat vs. Hormel Foods | Beyond Meat vs. Kellanova | Beyond Meat vs. General Mills |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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