Correlation Between MACOM Technology and Safe
Can any of the company-specific risk be diversified away by investing in both MACOM Technology and Safe 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 Safe 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 Safe and Green, you can compare the effects of market volatilities on MACOM Technology and Safe 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 Safe. Check out your portfolio center. Please also check ongoing floating volatility patterns of MACOM Technology and Safe.
Diversification Opportunities for MACOM Technology and Safe
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MACOM and Safe is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding MACOM Technology Solutions and Safe and Green in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safe and Green 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 Safe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safe and Green has no effect on the direction of MACOM Technology i.e., MACOM Technology and Safe go up and down completely randomly.
Pair Corralation between MACOM Technology and Safe
Given the investment horizon of 90 days MACOM Technology Solutions is expected to generate 0.32 times more return on investment than Safe. However, MACOM Technology Solutions is 3.12 times less risky than Safe. It trades about 0.19 of its potential returns per unit of risk. Safe and Green is currently generating about -0.1 per unit of risk. If you would invest 10,006 in MACOM Technology Solutions on September 4, 2024 and sell it today you would earn a total of 3,684 from holding MACOM Technology Solutions or generate 36.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MACOM Technology Solutions vs. Safe and Green
Performance |
| Timeline |
| MACOM Technology Sol |
| Safe and Green |
MACOM Technology and Safe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MACOM Technology and Safe
The main advantage of trading using opposite MACOM Technology and Safe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MACOM Technology position performs unexpectedly, Safe 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 Safe will offset losses from the drop in Safe's long position.| MACOM Technology vs. NXP Semiconductors NV | MACOM Technology vs. Analog Devices | MACOM Technology vs. Monolithic Power Systems | MACOM Technology vs. ON Semiconductor |
| Safe vs. MACOM Technology Solutions | Safe vs. FormFactor | Safe vs. Amkor Technology | Safe vs. Grupo Televisa SAB |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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