Correlation Between Marvell Technology and Magazine Luiza
Can any of the company-specific risk be diversified away by investing in both Marvell Technology and Magazine Luiza 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 Marvell Technology and Magazine Luiza into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marvell Technology and Magazine Luiza SA, you can compare the effects of market volatilities on Marvell Technology and Magazine Luiza 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 Marvell Technology with a short position of Magazine Luiza. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marvell Technology and Magazine Luiza.
Diversification Opportunities for Marvell Technology and Magazine Luiza
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Marvell and Magazine is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Marvell Technology and Magazine Luiza SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magazine Luiza SA and Marvell Technology 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 Marvell Technology are associated (or correlated) with Magazine Luiza. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magazine Luiza SA has no effect on the direction of Marvell Technology i.e., Marvell Technology and Magazine Luiza go up and down completely randomly.
Pair Corralation between Marvell Technology and Magazine Luiza
Assuming the 90 days trading horizon Marvell Technology is expected to generate 0.72 times more return on investment than Magazine Luiza. However, Marvell Technology is 1.39 times less risky than Magazine Luiza. It trades about 0.25 of its potential returns per unit of risk. Magazine Luiza SA is currently generating about 0.09 per unit of risk. If you would invest 4,775 in Marvell Technology on August 28, 2024 and sell it today you would earn a total of 645.00 from holding Marvell Technology or generate 13.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marvell Technology vs. Magazine Luiza SA
Performance |
| Timeline |
| Marvell Technology |
| Magazine Luiza SA |
Marvell Technology and Magazine Luiza Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marvell Technology and Magazine Luiza
The main advantage of trading using opposite Marvell Technology and Magazine Luiza positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marvell Technology position performs unexpectedly, Magazine Luiza 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 Magazine Luiza will offset losses from the drop in Magazine Luiza's long position.| Marvell Technology vs. Take Two Interactive Software | Marvell Technology vs. Bread Financial Holdings | Marvell Technology vs. NXP Semiconductors NV | Marvell Technology vs. Sumitomo Mitsui Financial |
| Magazine Luiza vs. Baidu Inc | Magazine Luiza vs. Deutsche Bank Aktiengesellschaft | Magazine Luiza vs. HSBC Holdings plc | Magazine Luiza vs. The Bank of |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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