Correlation Between Intel and Marvell Technology
Can any of the company-specific risk be diversified away by investing in both Intel and Marvell 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 Intel and Marvell Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and Marvell Technology Group, you can compare the effects of market volatilities on Intel and Marvell 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 Intel with a short position of Marvell Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and Marvell Technology.
Diversification Opportunities for Intel and Marvell Technology
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Intel and Marvell is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Marvell Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marvell Technology and Intel 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 Intel are associated (or correlated) with Marvell Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marvell Technology has no effect on the direction of Intel i.e., Intel and Marvell Technology go up and down completely randomly.
Pair Corralation between Intel and Marvell Technology
Given the investment horizon of 90 days Intel is expected to generate 17.32 times less return on investment than Marvell Technology. But when comparing it to its historical volatility, Intel is 1.17 times less risky than Marvell Technology. It trades about 0.0 of its potential returns per unit of risk. Marvell Technology Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 4,433 in Marvell Technology Group on August 23, 2024 and sell it today you would earn a total of 4,861 from holding Marvell Technology Group or generate 109.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intel vs. Marvell Technology Group
Performance |
| Timeline |
| Intel |
| Marvell Technology |
Intel and Marvell Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intel and Marvell Technology
The main advantage of trading using opposite Intel and Marvell Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, Marvell 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 Marvell Technology will offset losses from the drop in Marvell Technology's long position.| Intel vs. NVIDIA | Intel vs. Taiwan Semiconductor Manufacturing | Intel vs. Marvell Technology Group | Intel vs. Micron Technology |
| Marvell Technology vs. NVIDIA | Marvell Technology vs. Intel | Marvell Technology vs. Taiwan Semiconductor Manufacturing | Marvell Technology vs. Micron 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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