Correlation Between Marvell Technology and Ams AG
Can any of the company-specific risk be diversified away by investing in both Marvell Technology and Ams AG 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 Ams AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marvell Technology Group and ams AG, you can compare the effects of market volatilities on Marvell Technology and Ams AG 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 Ams AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marvell Technology and Ams AG.
Diversification Opportunities for Marvell Technology and Ams AG
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Marvell and Ams is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Marvell Technology Group and ams AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ams AG 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 Group are associated (or correlated) with Ams AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ams AG has no effect on the direction of Marvell Technology i.e., Marvell Technology and Ams AG go up and down completely randomly.
Pair Corralation between Marvell Technology and Ams AG
Given the investment horizon of 90 days Marvell Technology is expected to generate 347.89 times less return on investment than Ams AG. But when comparing it to its historical volatility, Marvell Technology Group is 80.42 times less risky than Ams AG. It trades about 0.07 of its potential returns per unit of risk. ams AG is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 3,557 in ams AG on August 29, 2024 and sell it today you would lose (3,177) from holding ams AG or give up 89.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Marvell Technology Group vs. ams AG
Performance |
| Timeline |
| Marvell Technology |
| ams AG |
Marvell Technology and Ams AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marvell Technology and Ams AG
The main advantage of trading using opposite Marvell Technology and Ams AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marvell Technology position performs unexpectedly, Ams AG 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 Ams AG will offset losses from the drop in Ams AG's long position.| Marvell Technology vs. NVIDIA | Marvell Technology vs. Intel | Marvell Technology vs. Taiwan Semiconductor Manufacturing | Marvell Technology vs. Micron Technology |
| Ams AG vs. Aeluma Inc | Ams AG vs. Odyssey Semiconductor Technologies | Ams AG vs. Rohm Co Ltd | Ams AG vs. Intchains Group Limited |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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