Correlation Between MACOM Technology and Aurora Acquisition
Can any of the company-specific risk be diversified away by investing in both MACOM Technology and Aurora Acquisition 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 Aurora Acquisition 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 Aurora Acquisition Corp, you can compare the effects of market volatilities on MACOM Technology and Aurora Acquisition 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 Aurora Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of MACOM Technology and Aurora Acquisition.
Diversification Opportunities for MACOM Technology and Aurora Acquisition
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MACOM and Aurora is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding MACOM Technology Solutions and Aurora Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Acquisition Corp 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 Aurora Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurora Acquisition Corp has no effect on the direction of MACOM Technology i.e., MACOM Technology and Aurora Acquisition go up and down completely randomly.
Pair Corralation between MACOM Technology and Aurora Acquisition
If you would invest 11,380 in MACOM Technology Solutions on September 4, 2024 and sell it today you would earn a total of 2,310 from holding MACOM Technology Solutions or generate 20.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 4.76% |
| Values | Daily Returns |
MACOM Technology Solutions vs. Aurora Acquisition Corp
Performance |
| Timeline |
| MACOM Technology Sol |
| Aurora Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
MACOM Technology and Aurora Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MACOM Technology and Aurora Acquisition
The main advantage of trading using opposite MACOM Technology and Aurora Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MACOM Technology position performs unexpectedly, Aurora Acquisition 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 Aurora Acquisition will offset losses from the drop in Aurora Acquisition'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 |
| Aurora Acquisition vs. Cedar Realty Trust | Aurora Acquisition vs. The Gap, | Aurora Acquisition vs. Chewy Inc | Aurora Acquisition vs. Asbury Automotive Group |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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