Correlation Between Hong Kong and MACOM Technology
Can any of the company-specific risk be diversified away by investing in both Hong Kong 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 Hong Kong and MACOM Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hong Kong Exchanges and MACOM Technology Solutions, you can compare the effects of market volatilities on Hong Kong 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 Hong Kong with a short position of MACOM Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hong Kong and MACOM Technology.
Diversification Opportunities for Hong Kong and MACOM Technology
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hong and MACOM is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Hong Kong Exchanges 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 Hong Kong 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 Hong Kong Exchanges 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 Hong Kong i.e., Hong Kong and MACOM Technology go up and down completely randomly.
Pair Corralation between Hong Kong and MACOM Technology
Assuming the 90 days trading horizon Hong Kong Exchanges is expected to generate 0.76 times more return on investment than MACOM Technology. However, Hong Kong Exchanges is 1.31 times less risky than MACOM Technology. It trades about 0.09 of its potential returns per unit of risk. MACOM Technology Solutions is currently generating about -0.03 per unit of risk. If you would invest 3,557 in Hong Kong Exchanges on November 3, 2024 and sell it today you would earn a total of 245.00 from holding Hong Kong Exchanges or generate 6.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hong Kong Exchanges vs. MACOM Technology Solutions
Performance |
| Timeline |
| Hong Kong Exchanges |
| MACOM Technology Sol |
Hong Kong and MACOM Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hong Kong and MACOM Technology
The main advantage of trading using opposite Hong Kong and MACOM Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hong Kong 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.| Hong Kong vs. Grand Canyon Education | Hong Kong vs. Harmony Gold Mining | Hong Kong vs. GALENA MINING LTD | Hong Kong vs. Stag Industrial |
| MACOM Technology vs. CHIBA BANK | MACOM Technology vs. DISTRICT METALS | MACOM Technology vs. Chiba Bank | MACOM Technology vs. GALENA MINING LTD |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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