Correlation Between Marvell Technology and BCM Resources
Can any of the company-specific risk be diversified away by investing in both Marvell Technology and BCM Resources 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 BCM Resources 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 BCM Resources, you can compare the effects of market volatilities on Marvell Technology and BCM Resources 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 BCM Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marvell Technology and BCM Resources.
Diversification Opportunities for Marvell Technology and BCM Resources
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Marvell and BCM is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Marvell Technology Group and BCM Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCM Resources 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 BCM Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BCM Resources has no effect on the direction of Marvell Technology i.e., Marvell Technology and BCM Resources go up and down completely randomly.
Pair Corralation between Marvell Technology and BCM Resources
Given the investment horizon of 90 days Marvell Technology Group is expected to generate 0.35 times more return on investment than BCM Resources. However, Marvell Technology Group is 2.9 times less risky than BCM Resources. It trades about 0.06 of its potential returns per unit of risk. BCM Resources is currently generating about 0.02 per unit of risk. If you would invest 5,967 in Marvell Technology Group on September 1, 2024 and sell it today you would earn a total of 3,302 from holding Marvell Technology Group or generate 55.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.47% |
| Values | Daily Returns |
Marvell Technology Group vs. BCM Resources
Performance |
| Timeline |
| Marvell Technology |
| BCM Resources |
Marvell Technology and BCM Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marvell Technology and BCM Resources
The main advantage of trading using opposite Marvell Technology and BCM Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marvell Technology position performs unexpectedly, BCM Resources 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 BCM Resources will offset losses from the drop in BCM Resources' long position.| Marvell Technology vs. NVIDIA | Marvell Technology vs. Intel | Marvell Technology vs. Taiwan Semiconductor Manufacturing | Marvell Technology vs. Micron Technology |
| BCM Resources vs. Liontown Resources Limited | BCM Resources vs. ATT Inc | BCM Resources vs. Merck Company | BCM Resources vs. Walt Disney |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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