Correlation Between Marvell Technology and OM Holdings
Can any of the company-specific risk be diversified away by investing in both Marvell Technology and OM Holdings 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 OM Holdings 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 OM Holdings Limited, you can compare the effects of market volatilities on Marvell Technology and OM Holdings 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 OM Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marvell Technology and OM Holdings.
Diversification Opportunities for Marvell Technology and OM Holdings
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Marvell and OMHLF is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Marvell Technology Group and OM Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OM Holdings 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 OM Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OM Holdings Limited has no effect on the direction of Marvell Technology i.e., Marvell Technology and OM Holdings go up and down completely randomly.
Pair Corralation between Marvell Technology and OM Holdings
Given the investment horizon of 90 days Marvell Technology Group is expected to generate 1.22 times more return on investment than OM Holdings. However, Marvell Technology is 1.22 times more volatile than OM Holdings Limited. It trades about 0.06 of its potential returns per unit of risk. OM Holdings Limited is currently generating about -0.04 per unit of risk. If you would invest 4,471 in Marvell Technology Group on August 27, 2024 and sell it today you would earn a total of 4,780 from holding Marvell Technology Group or generate 106.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marvell Technology Group vs. OM Holdings Limited
Performance |
| Timeline |
| Marvell Technology |
| OM Holdings Limited |
Marvell Technology and OM Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marvell Technology and OM Holdings
The main advantage of trading using opposite Marvell Technology and OM Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marvell Technology position performs unexpectedly, OM Holdings 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 OM Holdings will offset losses from the drop in OM Holdings' 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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