Correlation Between MACOM Technology and CERo Therapeutics
Can any of the company-specific risk be diversified away by investing in both MACOM Technology and CERo Therapeutics 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 CERo Therapeutics 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 CERo Therapeutics Holdings, you can compare the effects of market volatilities on MACOM Technology and CERo Therapeutics 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 CERo Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of MACOM Technology and CERo Therapeutics.
Diversification Opportunities for MACOM Technology and CERo Therapeutics
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between MACOM and CERo is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding MACOM Technology Solutions and CERo Therapeutics Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CERo Therapeutics 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 CERo Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CERo Therapeutics has no effect on the direction of MACOM Technology i.e., MACOM Technology and CERo Therapeutics go up and down completely randomly.
Pair Corralation between MACOM Technology and CERo Therapeutics
Given the investment horizon of 90 days MACOM Technology is expected to generate 9.34 times less return on investment than CERo Therapeutics. But when comparing it to its historical volatility, MACOM Technology Solutions is 8.38 times less risky than CERo Therapeutics. It trades about 0.27 of its potential returns per unit of risk. CERo Therapeutics Holdings is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 0.93 in CERo Therapeutics Holdings on October 29, 2024 and sell it today you would earn a total of 1.02 from holding CERo Therapeutics Holdings or generate 109.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MACOM Technology Solutions vs. CERo Therapeutics Holdings
Performance |
| Timeline |
| MACOM Technology Sol |
| CERo Therapeutics |
MACOM Technology and CERo Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MACOM Technology and CERo Therapeutics
The main advantage of trading using opposite MACOM Technology and CERo Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MACOM Technology position performs unexpectedly, CERo Therapeutics 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 CERo Therapeutics will offset losses from the drop in CERo Therapeutics' long position.| MACOM Technology vs. Power Integrations | MACOM Technology vs. Diodes Incorporated | MACOM Technology vs. Cirrus Logic | MACOM Technology vs. Amkor Technology |
| CERo Therapeutics vs. Franklin Wireless Corp | CERo Therapeutics vs. Acco Brands | CERo Therapeutics vs. Lincoln Electric Holdings | CERo Therapeutics vs. Merit Medical Systems |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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