Correlation Between RETAIL FOOD and MACOM Technology
Can any of the company-specific risk be diversified away by investing in both RETAIL FOOD 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 RETAIL FOOD and MACOM Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RETAIL FOOD GROUP and MACOM Technology Solutions, you can compare the effects of market volatilities on RETAIL FOOD 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 RETAIL FOOD with a short position of MACOM Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of RETAIL FOOD and MACOM Technology.
Diversification Opportunities for RETAIL FOOD and MACOM Technology
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between RETAIL and MACOM is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding RETAIL FOOD GROUP 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 RETAIL FOOD 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 RETAIL FOOD GROUP 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 RETAIL FOOD i.e., RETAIL FOOD and MACOM Technology go up and down completely randomly.
Pair Corralation between RETAIL FOOD and MACOM Technology
Assuming the 90 days trading horizon RETAIL FOOD GROUP is expected to under-perform the MACOM Technology. In addition to that, RETAIL FOOD is 1.32 times more volatile than MACOM Technology Solutions. It trades about -0.03 of its total potential returns per unit of risk. MACOM Technology Solutions is currently generating about 0.08 per unit of volatility. If you would invest 6,150 in MACOM Technology Solutions on October 28, 2024 and sell it today you would earn a total of 7,550 from holding MACOM Technology Solutions or generate 122.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RETAIL FOOD GROUP vs. MACOM Technology Solutions
Performance |
| Timeline |
| RETAIL FOOD GROUP |
| MACOM Technology Sol |
RETAIL FOOD and MACOM Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RETAIL FOOD and MACOM Technology
The main advantage of trading using opposite RETAIL FOOD and MACOM Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RETAIL FOOD 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.| RETAIL FOOD vs. Genertec Universal Medical | RETAIL FOOD vs. TITAN MACHINERY | RETAIL FOOD vs. CVR Medical Corp | RETAIL FOOD vs. ONWARD MEDICAL BV |
| MACOM Technology vs. Quaker Chemical | MACOM Technology vs. China BlueChemical | MACOM Technology vs. GALENA MINING LTD | MACOM Technology vs. SERI INDUSTRIAL EO |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |