Correlation Between MaxLinear and FormFactor
Can any of the company-specific risk be diversified away by investing in both MaxLinear and FormFactor 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 MaxLinear and FormFactor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MaxLinear and FormFactor, you can compare the effects of market volatilities on MaxLinear and FormFactor 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 MaxLinear with a short position of FormFactor. Check out your portfolio center. Please also check ongoing floating volatility patterns of MaxLinear and FormFactor.
Diversification Opportunities for MaxLinear and FormFactor
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MaxLinear and FormFactor is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding MaxLinear and FormFactor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FormFactor and MaxLinear 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 MaxLinear are associated (or correlated) with FormFactor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FormFactor has no effect on the direction of MaxLinear i.e., MaxLinear and FormFactor go up and down completely randomly.
Pair Corralation between MaxLinear and FormFactor
Considering the 90-day investment horizon MaxLinear is expected to generate 1.23 times more return on investment than FormFactor. However, MaxLinear is 1.23 times more volatile than FormFactor. It trades about 0.08 of its potential returns per unit of risk. FormFactor is currently generating about -0.04 per unit of risk. If you would invest 1,487 in MaxLinear on August 24, 2024 and sell it today you would earn a total of 87.00 from holding MaxLinear or generate 5.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MaxLinear vs. FormFactor
Performance |
| Timeline |
| MaxLinear |
| FormFactor |
MaxLinear and FormFactor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MaxLinear and FormFactor
The main advantage of trading using opposite MaxLinear and FormFactor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MaxLinear position performs unexpectedly, FormFactor 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 FormFactor will offset losses from the drop in FormFactor's long position.| MaxLinear vs. ASE Industrial Holding | MaxLinear vs. Himax Technologies | MaxLinear vs. United Microelectronics | MaxLinear vs. SemiLEDS |
| FormFactor vs. Silicon Laboratories | FormFactor vs. Diodes Incorporated | FormFactor vs. MACOM Technology Solutions | FormFactor vs. Amkor Technology |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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