Correlation Between MACOM Technology and Global Net
Can any of the company-specific risk be diversified away by investing in both MACOM Technology and Global Net 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 Global Net 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 Global Net Lease, you can compare the effects of market volatilities on MACOM Technology and Global Net 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 Global Net. Check out your portfolio center. Please also check ongoing floating volatility patterns of MACOM Technology and Global Net.
Diversification Opportunities for MACOM Technology and Global Net
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between MACOM and Global is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding MACOM Technology Solutions and Global Net Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Net Lease 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 Global Net. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Net Lease has no effect on the direction of MACOM Technology i.e., MACOM Technology and Global Net go up and down completely randomly.
Pair Corralation between MACOM Technology and Global Net
Given the investment horizon of 90 days MACOM Technology Solutions is expected to generate 3.16 times more return on investment than Global Net. However, MACOM Technology is 3.16 times more volatile than Global Net Lease. It trades about 0.18 of its potential returns per unit of risk. Global Net Lease is currently generating about 0.16 per unit of risk. If you would invest 9,797 in MACOM Technology Solutions on September 2, 2024 and sell it today you would earn a total of 3,485 from holding MACOM Technology Solutions or generate 35.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MACOM Technology Solutions vs. Global Net Lease
Performance |
| Timeline |
| MACOM Technology Sol |
| Global Net Lease |
MACOM Technology and Global Net Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MACOM Technology and Global Net
The main advantage of trading using opposite MACOM Technology and Global Net positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MACOM Technology position performs unexpectedly, Global Net 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 Global Net will offset losses from the drop in Global Net's long position.| MACOM Technology vs. NXP Semiconductors NV | MACOM Technology vs. GSI Technology | MACOM Technology vs. MaxLinear | MACOM Technology vs. Texas Instruments Incorporated |
| Global Net vs. Micron Technology | Global Net vs. MACOM Technology Solutions | Global Net vs. Everspin Technologies | Global Net vs. Tower Semiconductor |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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