Correlation Between MACOM Technology and Oak Woods
Can any of the company-specific risk be diversified away by investing in both MACOM Technology and Oak Woods 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 Oak Woods 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 Oak Woods Acquisition, you can compare the effects of market volatilities on MACOM Technology and Oak Woods 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 Oak Woods. Check out your portfolio center. Please also check ongoing floating volatility patterns of MACOM Technology and Oak Woods.
Diversification Opportunities for MACOM Technology and Oak Woods
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between MACOM and Oak is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding MACOM Technology Solutions and Oak Woods Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oak Woods Acquisition 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 Oak Woods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oak Woods Acquisition has no effect on the direction of MACOM Technology i.e., MACOM Technology and Oak Woods go up and down completely randomly.
Pair Corralation between MACOM Technology and Oak Woods
Given the investment horizon of 90 days MACOM Technology Solutions is expected to under-perform the Oak Woods. In addition to that, MACOM Technology is 5.17 times more volatile than Oak Woods Acquisition. It trades about -0.05 of its total potential returns per unit of risk. Oak Woods Acquisition is currently generating about 0.1 per unit of volatility. If you would invest 1,144 in Oak Woods Acquisition on November 5, 2024 and sell it today you would earn a total of 17.00 from holding Oak Woods Acquisition or generate 1.49% 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. Oak Woods Acquisition
Performance |
| Timeline |
| MACOM Technology Sol |
| Oak Woods Acquisition |
MACOM Technology and Oak Woods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MACOM Technology and Oak Woods
The main advantage of trading using opposite MACOM Technology and Oak Woods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MACOM Technology position performs unexpectedly, Oak Woods 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 Oak Woods will offset losses from the drop in Oak Woods' long position.| MACOM Technology vs. Power Integrations | MACOM Technology vs. Diodes Incorporated | MACOM Technology vs. Cirrus Logic | MACOM Technology vs. Amkor Technology |
| Oak Woods vs. United Natural Foods | Oak Woods vs. Aldel Financial II | Oak Woods vs. WK Kellogg Co | Oak Woods vs. Astral Foods Limited |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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