Correlation Between Jefferies Financial and Marvell Technology
Can any of the company-specific risk be diversified away by investing in both Jefferies Financial 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 Jefferies Financial and Marvell Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jefferies Financial Group and Marvell Technology, you can compare the effects of market volatilities on Jefferies Financial 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 Jefferies Financial with a short position of Marvell Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jefferies Financial and Marvell Technology.
Diversification Opportunities for Jefferies Financial and Marvell Technology
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Jefferies and Marvell is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Jefferies Financial Group and Marvell Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marvell Technology and Jefferies Financial 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 Jefferies Financial Group 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 Jefferies Financial i.e., Jefferies Financial and Marvell Technology go up and down completely randomly.
Pair Corralation between Jefferies Financial and Marvell Technology
Assuming the 90 days trading horizon Jefferies Financial is expected to generate 2.35 times less return on investment than Marvell Technology. But when comparing it to its historical volatility, Jefferies Financial Group is 2.82 times less risky than Marvell Technology. It trades about 0.2 of its potential returns per unit of risk. Marvell Technology is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 5,320 in Marvell Technology on October 11, 2024 and sell it today you would earn a total of 1,830 from holding Marvell Technology or generate 34.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jefferies Financial Group vs. Marvell Technology
Performance |
| Timeline |
| Jefferies Financial |
| Marvell Technology |
Jefferies Financial and Marvell Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jefferies Financial and Marvell Technology
The main advantage of trading using opposite Jefferies Financial and Marvell Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jefferies Financial 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.| Jefferies Financial vs. Energisa SA | Jefferies Financial vs. BTG Pactual Logstica | Jefferies Financial vs. Plano Plano Desenvolvimento | Jefferies Financial vs. Ares Management |
| Marvell Technology vs. Clover Health Investments, | Marvell Technology vs. G2D Investments | Marvell Technology vs. Westinghouse Air Brake | Marvell Technology vs. Live Nation Entertainment, |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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