Correlation Between MACOM Technology and Aldel Financial
Can any of the company-specific risk be diversified away by investing in both MACOM Technology and Aldel Financial 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 MACOM Technology and Aldel Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MACOM Technology Solutions and Aldel Financial II, you can compare the effects of market volatilities on MACOM Technology and Aldel Financial 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 MACOM Technology with a short position of Aldel Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of MACOM Technology and Aldel Financial.
Diversification Opportunities for MACOM Technology and Aldel Financial
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MACOM and Aldel is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding MACOM Technology Solutions and Aldel Financial II in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aldel Financial II and MACOM 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 MACOM Technology Solutions are associated (or correlated) with Aldel Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aldel Financial II has no effect on the direction of MACOM Technology i.e., MACOM Technology and Aldel Financial go up and down completely randomly.
Pair Corralation between MACOM Technology and Aldel Financial
Given the investment horizon of 90 days MACOM Technology Solutions is expected to generate 26.97 times more return on investment than Aldel Financial. However, MACOM Technology is 26.97 times more volatile than Aldel Financial II. It trades about 0.16 of its potential returns per unit of risk. Aldel Financial II is currently generating about 0.03 per unit of risk. If you would invest 9,605 in MACOM Technology Solutions on September 4, 2024 and sell it today you would earn a total of 4,085 from holding MACOM Technology Solutions or generate 42.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 35.29% |
| Values | Daily Returns |
MACOM Technology Solutions vs. Aldel Financial II
Performance |
| Timeline |
| MACOM Technology Sol |
| Aldel Financial II |
MACOM Technology and Aldel Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MACOM Technology and Aldel Financial
The main advantage of trading using opposite MACOM Technology and Aldel Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MACOM Technology position performs unexpectedly, Aldel Financial 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 Aldel Financial will offset losses from the drop in Aldel Financial's long position.| MACOM Technology vs. NXP Semiconductors NV | MACOM Technology vs. Analog Devices | MACOM Technology vs. Monolithic Power Systems | MACOM Technology vs. ON Semiconductor |
| Aldel Financial vs. Saia Inc | Aldel Financial vs. The Gap, | Aldel Financial vs. Summit Materials | Aldel Financial vs. Barrick Gold Corp |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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