Correlation Between RadNet and MACOM Technology
Can any of the company-specific risk be diversified away by investing in both RadNet and MACOM Technology 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 RadNet and MACOM Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RadNet Inc and MACOM Technology Solutions, you can compare the effects of market volatilities on RadNet and MACOM Technology 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 RadNet with a short position of MACOM Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of RadNet and MACOM Technology.
Diversification Opportunities for RadNet and MACOM Technology
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between RadNet and MACOM is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding RadNet Inc and MACOM Technology Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MACOM Technology Sol and RadNet 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 RadNet Inc are associated (or correlated) with MACOM Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MACOM Technology Sol has no effect on the direction of RadNet i.e., RadNet and MACOM Technology go up and down completely randomly.
Pair Corralation between RadNet and MACOM Technology
Given the investment horizon of 90 days RadNet Inc is expected to generate 1.08 times more return on investment than MACOM Technology. However, RadNet is 1.08 times more volatile than MACOM Technology Solutions. It trades about 0.13 of its potential returns per unit of risk. MACOM Technology Solutions is currently generating about 0.07 per unit of risk. If you would invest 2,010 in RadNet Inc on September 3, 2024 and sell it today you would earn a total of 6,275 from holding RadNet Inc or generate 312.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
RadNet Inc vs. MACOM Technology Solutions
Performance |
| Timeline |
| RadNet Inc |
| MACOM Technology Sol |
RadNet and MACOM Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RadNet and MACOM Technology
The main advantage of trading using opposite RadNet and MACOM Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RadNet position performs unexpectedly, MACOM Technology 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 MACOM Technology will offset losses from the drop in MACOM Technology's long position.| RadNet vs. Sotera Health Co | RadNet vs. Neogen | RadNet vs. Myriad Genetics | RadNet vs. bioAffinity Technologies Warrant |
| MACOM Technology vs. Power Integrations | MACOM Technology vs. Diodes Incorporated | MACOM Technology vs. Cirrus Logic | MACOM Technology 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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