Correlation Between MACOM Technology and GCT Semiconductor
Can any of the company-specific risk be diversified away by investing in both MACOM Technology and GCT Semiconductor 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 GCT Semiconductor 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 GCT Semiconductor Holding, you can compare the effects of market volatilities on MACOM Technology and GCT Semiconductor 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 GCT Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of MACOM Technology and GCT Semiconductor.
Diversification Opportunities for MACOM Technology and GCT Semiconductor
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MACOM and GCT is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding MACOM Technology Solutions and GCT Semiconductor Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GCT Semiconductor Holding 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 GCT Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GCT Semiconductor Holding has no effect on the direction of MACOM Technology i.e., MACOM Technology and GCT Semiconductor go up and down completely randomly.
Pair Corralation between MACOM Technology and GCT Semiconductor
Given the investment horizon of 90 days MACOM Technology Solutions is expected to generate 0.38 times more return on investment than GCT Semiconductor. However, MACOM Technology Solutions is 2.64 times less risky than GCT Semiconductor. It trades about 0.06 of its potential returns per unit of risk. GCT Semiconductor Holding is currently generating about -0.05 per unit of risk. If you would invest 13,449 in MACOM Technology Solutions on September 12, 2024 and sell it today you would earn a total of 318.50 from holding MACOM Technology Solutions or generate 2.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MACOM Technology Solutions vs. GCT Semiconductor Holding
Performance |
| Timeline |
| MACOM Technology Sol |
| GCT Semiconductor Holding |
MACOM Technology and GCT Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MACOM Technology and GCT Semiconductor
The main advantage of trading using opposite MACOM Technology and GCT Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MACOM Technology position performs unexpectedly, GCT Semiconductor 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 GCT Semiconductor will offset losses from the drop in GCT Semiconductor's long position.| MACOM Technology vs. NVIDIA | MACOM Technology vs. Taiwan Semiconductor Manufacturing | MACOM Technology vs. Micron Technology | MACOM Technology vs. Qualcomm Incorporated |
| GCT Semiconductor vs. Arrow Electronics | GCT Semiconductor vs. Cadence Design Systems | GCT Semiconductor vs. Paltalk | GCT Semiconductor vs. Sapiens International |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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