Correlation Between Marvell Technology and IGO
Can any of the company-specific risk be diversified away by investing in both Marvell Technology and IGO 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 IGO 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 IGO Limited, you can compare the effects of market volatilities on Marvell Technology and IGO 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 IGO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marvell Technology and IGO.
Diversification Opportunities for Marvell Technology and IGO
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Marvell and IGO is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Marvell Technology Group and IGO Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IGO Limited 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 IGO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IGO Limited has no effect on the direction of Marvell Technology i.e., Marvell Technology and IGO go up and down completely randomly.
Pair Corralation between Marvell Technology and IGO
Given the investment horizon of 90 days Marvell Technology Group is expected to generate 0.51 times more return on investment than IGO. However, Marvell Technology Group is 1.95 times less risky than IGO. It trades about 0.08 of its potential returns per unit of risk. IGO Limited is currently generating about 0.01 per unit of risk. If you would invest 5,590 in Marvell Technology Group on August 25, 2024 and sell it today you would earn a total of 3,661 from holding Marvell Technology Group or generate 65.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.6% |
| Values | Daily Returns |
Marvell Technology Group vs. IGO Limited
Performance |
| Timeline |
| Marvell Technology |
| IGO Limited |
Marvell Technology and IGO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marvell Technology and IGO
The main advantage of trading using opposite Marvell Technology and IGO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marvell Technology position performs unexpectedly, IGO 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 IGO will offset losses from the drop in IGO's long position.| Marvell Technology vs. Teradyne | Marvell Technology vs. IPG Photonics | Marvell Technology vs. Applied Materials |
| IGO vs. Norra Metals Corp | IGO vs. ZincX Resources Corp | IGO vs. Nuinsco Resources Limited | IGO vs. South Star Battery |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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