Correlation Between MACOM Technology and Amgen
Can any of the company-specific risk be diversified away by investing in both MACOM Technology and Amgen 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 Amgen 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 Amgen Inc, you can compare the effects of market volatilities on MACOM Technology and Amgen 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 Amgen. Check out your portfolio center. Please also check ongoing floating volatility patterns of MACOM Technology and Amgen.
Diversification Opportunities for MACOM Technology and Amgen
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MACOM and Amgen is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding MACOM Technology Solutions and Amgen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amgen Inc 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 Amgen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amgen Inc has no effect on the direction of MACOM Technology i.e., MACOM Technology and Amgen go up and down completely randomly.
Pair Corralation between MACOM Technology and Amgen
Given the investment horizon of 90 days MACOM Technology Solutions is expected to generate 1.61 times more return on investment than Amgen. However, MACOM Technology is 1.61 times more volatile than Amgen Inc. It trades about 0.07 of its potential returns per unit of risk. Amgen Inc is currently generating about 0.02 per unit of risk. If you would invest 7,002 in MACOM Technology Solutions on September 3, 2024 and sell it today you would earn a total of 6,688 from holding MACOM Technology Solutions or generate 95.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MACOM Technology Solutions vs. Amgen Inc
Performance |
| Timeline |
| MACOM Technology Sol |
| Amgen Inc |
MACOM Technology and Amgen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MACOM Technology and Amgen
The main advantage of trading using opposite MACOM Technology and Amgen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MACOM Technology position performs unexpectedly, Amgen 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 Amgen will offset losses from the drop in Amgen's long position.| MACOM Technology vs. Power Integrations | MACOM Technology vs. Diodes Incorporated | MACOM Technology vs. Cirrus Logic | MACOM Technology vs. Amkor Technology |
| Amgen vs. Pfizer Inc | Amgen vs. Johnson Johnson | Amgen vs. Highway Holdings Limited | Amgen vs. QCR Holdings |
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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