Correlation Between MACOM Technology and Borealis Foods
Can any of the company-specific risk be diversified away by investing in both MACOM Technology and Borealis Foods 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 Borealis Foods 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 Borealis Foods, you can compare the effects of market volatilities on MACOM Technology and Borealis Foods 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 Borealis Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of MACOM Technology and Borealis Foods.
Diversification Opportunities for MACOM Technology and Borealis Foods
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between MACOM and Borealis is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding MACOM Technology Solutions and Borealis Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Borealis Foods 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 Borealis Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Borealis Foods has no effect on the direction of MACOM Technology i.e., MACOM Technology and Borealis Foods go up and down completely randomly.
Pair Corralation between MACOM Technology and Borealis Foods
Given the investment horizon of 90 days MACOM Technology is expected to generate 1.16 times less return on investment than Borealis Foods. But when comparing it to its historical volatility, MACOM Technology Solutions is 2.25 times less risky than Borealis Foods. It trades about 0.24 of its potential returns per unit of risk. Borealis Foods is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 6.10 in Borealis Foods on September 1, 2024 and sell it today you would earn a total of 0.90 from holding Borealis Foods or generate 14.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
MACOM Technology Solutions vs. Borealis Foods
Performance |
| Timeline |
| MACOM Technology Sol |
| Borealis Foods |
MACOM Technology and Borealis Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MACOM Technology and Borealis Foods
The main advantage of trading using opposite MACOM Technology and Borealis Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MACOM Technology position performs unexpectedly, Borealis Foods 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 Borealis Foods will offset losses from the drop in Borealis Foods' long position.| MACOM Technology vs. Power Integrations | MACOM Technology vs. Diodes Incorporated | MACOM Technology vs. Cirrus Logic | MACOM Technology vs. Amkor Technology |
| Borealis Foods vs. Kaltura | Borealis Foods vs. Cedar Realty Trust | Borealis Foods vs. NetSol Technologies | Borealis Foods vs. GMS Inc |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |