Correlation Between Marvell Technology and Equinor ASA
Can any of the company-specific risk be diversified away by investing in both Marvell Technology and Equinor ASA 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 Equinor ASA 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 Equinor ASA, you can compare the effects of market volatilities on Marvell Technology and Equinor ASA 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 Equinor ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marvell Technology and Equinor ASA.
Diversification Opportunities for Marvell Technology and Equinor ASA
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Marvell and Equinor is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Marvell Technology Group and Equinor ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equinor ASA 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 Equinor ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equinor ASA has no effect on the direction of Marvell Technology i.e., Marvell Technology and Equinor ASA go up and down completely randomly.
Pair Corralation between Marvell Technology and Equinor ASA
Given the investment horizon of 90 days Marvell Technology Group is expected to generate 0.78 times more return on investment than Equinor ASA. However, Marvell Technology Group is 1.29 times less risky than Equinor ASA. It trades about 0.21 of its potential returns per unit of risk. Equinor ASA is currently generating about 0.02 per unit of risk. If you would invest 8,335 in Marvell Technology Group on August 23, 2024 and sell it today you would earn a total of 959.00 from holding Marvell Technology Group or generate 11.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marvell Technology Group vs. Equinor ASA
Performance |
| Timeline |
| Marvell Technology |
| Equinor ASA |
Marvell Technology and Equinor ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marvell Technology and Equinor ASA
The main advantage of trading using opposite Marvell Technology and Equinor ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marvell Technology position performs unexpectedly, Equinor ASA 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 Equinor ASA will offset losses from the drop in Equinor ASA's long position.| Marvell Technology vs. NVIDIA | Marvell Technology vs. Intel | Marvell Technology vs. Taiwan Semiconductor Manufacturing | Marvell Technology vs. Micron Technology |
| Equinor ASA vs. Shell PLC ADR | Equinor ASA vs. Equinor ASA ADR | Equinor ASA vs. BP PLC ADR | Equinor ASA vs. Eni SpA ADR |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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