Correlation Between Marvell Technology and Starbucks
Can any of the company-specific risk be diversified away by investing in both Marvell Technology and Starbucks 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 Starbucks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marvell Technology and Starbucks, you can compare the effects of market volatilities on Marvell Technology and Starbucks 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 Starbucks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marvell Technology and Starbucks.
Diversification Opportunities for Marvell Technology and Starbucks
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Marvell and Starbucks is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Marvell Technology and Starbucks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Starbucks 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 Starbucks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Starbucks has no effect on the direction of Marvell Technology i.e., Marvell Technology and Starbucks go up and down completely randomly.
Pair Corralation between Marvell Technology and Starbucks
Assuming the 90 days trading horizon Marvell Technology is expected to under-perform the Starbucks. In addition to that, Marvell Technology is 2.13 times more volatile than Starbucks. It trades about -0.11 of its total potential returns per unit of risk. Starbucks is currently generating about 0.32 per unit of volatility. If you would invest 58,614 in Starbucks on November 29, 2024 and sell it today you would earn a total of 6,998 from holding Starbucks or generate 11.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Marvell Technology vs. Starbucks
Performance |
| Timeline |
| Marvell Technology |
| Starbucks |
Marvell Technology and Starbucks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marvell Technology and Starbucks
The main advantage of trading using opposite Marvell Technology and Starbucks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marvell Technology position performs unexpectedly, Starbucks 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 Starbucks will offset losses from the drop in Starbucks' long position.| Marvell Technology vs. Jefferies Financial Group | Marvell Technology vs. Credit Acceptance | Marvell Technology vs. TAL Education Group | Marvell Technology vs. Pentair plc |
| Starbucks vs. Extra Space Storage | Starbucks vs. Waste Management | Starbucks vs. Bemobi Mobile Tech | Starbucks vs. Public Storage |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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