Correlation Between MACOM Technology and Stingray
Can any of the company-specific risk be diversified away by investing in both MACOM Technology and Stingray 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 Stingray 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 Stingray Group, you can compare the effects of market volatilities on MACOM Technology and Stingray 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 Stingray. Check out your portfolio center. Please also check ongoing floating volatility patterns of MACOM Technology and Stingray.
Diversification Opportunities for MACOM Technology and Stingray
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MACOM and Stingray is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding MACOM Technology Solutions and Stingray Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stingray Group 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 Stingray. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stingray Group has no effect on the direction of MACOM Technology i.e., MACOM Technology and Stingray go up and down completely randomly.
Pair Corralation between MACOM Technology and Stingray
Given the investment horizon of 90 days MACOM Technology Solutions is expected to generate 0.92 times more return on investment than Stingray. However, MACOM Technology Solutions is 1.09 times less risky than Stingray. It trades about 0.1 of its potential returns per unit of risk. Stingray Group is currently generating about 0.06 per unit of risk. If you would invest 6,314 in MACOM Technology Solutions on August 28, 2024 and sell it today you would earn a total of 7,223 from holding MACOM Technology Solutions or generate 114.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.72% |
| Values | Daily Returns |
MACOM Technology Solutions vs. Stingray Group
Performance |
| Timeline |
| MACOM Technology Sol |
| Stingray Group |
MACOM Technology and Stingray Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MACOM Technology and Stingray
The main advantage of trading using opposite MACOM Technology and Stingray positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MACOM Technology position performs unexpectedly, Stingray 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 Stingray will offset losses from the drop in Stingray's long position.The idea behind MACOM Technology Solutions and Stingray Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Stingray vs. Copa Holdings SA | Stingray vs. United Airlines Holdings | Stingray vs. Delta Air Lines | Stingray vs. SkyWest |
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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