Correlation Between MACOM Technology and Park Hotels
Can any of the company-specific risk be diversified away by investing in both MACOM Technology and Park Hotels 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 Park Hotels 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 Park Hotels Resorts, you can compare the effects of market volatilities on MACOM Technology and Park Hotels 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 Park Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of MACOM Technology and Park Hotels.
Diversification Opportunities for MACOM Technology and Park Hotels
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MACOM and Park is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding MACOM Technology Solutions and Park Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Park Hotels Resorts 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 Park Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Park Hotels Resorts has no effect on the direction of MACOM Technology i.e., MACOM Technology and Park Hotels go up and down completely randomly.
Pair Corralation between MACOM Technology and Park Hotels
Given the investment horizon of 90 days MACOM Technology Solutions is expected to generate 1.97 times more return on investment than Park Hotels. However, MACOM Technology is 1.97 times more volatile than Park Hotels Resorts. It trades about 0.15 of its potential returns per unit of risk. Park Hotels Resorts is currently generating about 0.25 per unit of risk. If you would invest 11,781 in MACOM Technology Solutions on August 31, 2024 and sell it today you would earn a total of 1,386 from holding MACOM Technology Solutions or generate 11.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MACOM Technology Solutions vs. Park Hotels Resorts
Performance |
| Timeline |
| MACOM Technology Sol |
| Park Hotels Resorts |
MACOM Technology and Park Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MACOM Technology and Park Hotels
The main advantage of trading using opposite MACOM Technology and Park Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MACOM Technology position performs unexpectedly, Park Hotels 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 Park Hotels will offset losses from the drop in Park Hotels' long position.| MACOM Technology vs. Power Integrations | MACOM Technology vs. Diodes Incorporated | MACOM Technology vs. Cirrus Logic | MACOM Technology vs. Amkor Technology |
| Park Hotels vs. Diamondrock Hospitality | Park Hotels vs. Ryman Hospitality Properties | Park Hotels vs. Pebblebrook Hotel Trust | Park Hotels vs. Sunstone Hotel Investors |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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