Correlation Between Marvell Technology and GM
Can any of the company-specific risk be diversified away by investing in both Marvell Technology and GM 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 GM 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 General Motors, you can compare the effects of market volatilities on Marvell Technology and GM 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 GM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marvell Technology and GM.
Diversification Opportunities for Marvell Technology and GM
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Marvell and GM is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Marvell Technology Group and General Motors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Motors 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 GM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Motors has no effect on the direction of Marvell Technology i.e., Marvell Technology and GM go up and down completely randomly.
Pair Corralation between Marvell Technology and GM
Given the investment horizon of 90 days Marvell Technology is expected to generate 1.28 times less return on investment than GM. In addition to that, Marvell Technology is 1.22 times more volatile than General Motors. It trades about 0.2 of its total potential returns per unit of risk. General Motors is currently generating about 0.32 per unit of volatility. If you would invest 5,273 in General Motors on August 28, 2024 and sell it today you would earn a total of 747.00 from holding General Motors or generate 14.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marvell Technology Group vs. General Motors
Performance |
| Timeline |
| Marvell Technology |
| General Motors |
Marvell Technology and GM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marvell Technology and GM
The main advantage of trading using opposite Marvell Technology and GM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marvell Technology position performs unexpectedly, GM 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 GM will offset losses from the drop in GM's long position.| Marvell Technology vs. NVIDIA | Marvell Technology vs. Intel | Marvell Technology vs. Taiwan Semiconductor Manufacturing | Marvell Technology vs. Micron Technology |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |