Correlation Between Marvell Technology and AltaGas
Can any of the company-specific risk be diversified away by investing in both Marvell Technology and AltaGas 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 AltaGas 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 AltaGas, you can compare the effects of market volatilities on Marvell Technology and AltaGas 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 AltaGas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marvell Technology and AltaGas.
Diversification Opportunities for Marvell Technology and AltaGas
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Marvell and AltaGas is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Marvell Technology Group and AltaGas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AltaGas 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 AltaGas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AltaGas has no effect on the direction of Marvell Technology i.e., Marvell Technology and AltaGas go up and down completely randomly.
Pair Corralation between Marvell Technology and AltaGas
Given the investment horizon of 90 days Marvell Technology Group is expected to generate 1.07 times more return on investment than AltaGas. However, Marvell Technology is 1.07 times more volatile than AltaGas. It trades about 0.06 of its potential returns per unit of risk. AltaGas is currently generating about 0.05 per unit of risk. If you would invest 7,820 in Marvell Technology Group on August 24, 2024 and sell it today you would earn a total of 1,474 from holding Marvell Technology Group or generate 18.85% 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 Group vs. AltaGas
Performance |
| Timeline |
| Marvell Technology |
| AltaGas |
Marvell Technology and AltaGas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marvell Technology and AltaGas
The main advantage of trading using opposite Marvell Technology and AltaGas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marvell Technology position performs unexpectedly, AltaGas 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 AltaGas will offset losses from the drop in AltaGas' long position.| Marvell Technology vs. NVIDIA | Marvell Technology vs. Intel | Marvell Technology vs. Taiwan Semiconductor Manufacturing | Marvell Technology vs. Micron Technology |
| AltaGas vs. Southern Company Series | AltaGas vs. Southern Co | AltaGas vs. Talen Energy | AltaGas vs. CMS Energy Corp |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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