Correlation Between Marvell Technology and FNB
Can any of the company-specific risk be diversified away by investing in both Marvell Technology and FNB 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 FNB 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 FNB Inc, you can compare the effects of market volatilities on Marvell Technology and FNB 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 FNB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marvell Technology and FNB.
Diversification Opportunities for Marvell Technology and FNB
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Marvell and FNB is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Marvell Technology Group and FNB Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FNB Inc 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 FNB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FNB Inc has no effect on the direction of Marvell Technology i.e., Marvell Technology and FNB go up and down completely randomly.
Pair Corralation between Marvell Technology and FNB
Given the investment horizon of 90 days Marvell Technology Group is expected to generate 3.09 times more return on investment than FNB. However, Marvell Technology is 3.09 times more volatile than FNB Inc. It trades about 0.23 of its potential returns per unit of risk. FNB Inc is currently generating about 0.21 per unit of risk. If you would invest 8,193 in Marvell Technology Group on August 25, 2024 and sell it today you would earn a total of 1,058 from holding Marvell Technology Group or generate 12.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marvell Technology Group vs. FNB Inc
Performance |
| Timeline |
| Marvell Technology |
| FNB Inc |
Marvell Technology and FNB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marvell Technology and FNB
The main advantage of trading using opposite Marvell Technology and FNB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marvell Technology position performs unexpectedly, FNB 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 FNB will offset losses from the drop in FNB's long position.| Marvell Technology vs. Teradyne | Marvell Technology vs. IPG Photonics | Marvell Technology vs. Applied Materials |
| FNB vs. Standard Bank Group | FNB vs. PSB Holdings | FNB vs. United Overseas Bank | FNB vs. Turkiye Garanti Bankasi |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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