Correlation Between SolarEdge Technologies and MACOM Technology
Can any of the company-specific risk be diversified away by investing in both SolarEdge Technologies 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 SolarEdge Technologies and MACOM Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SolarEdge Technologies and MACOM Technology Solutions, you can compare the effects of market volatilities on SolarEdge Technologies 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 SolarEdge Technologies with a short position of MACOM Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of SolarEdge Technologies and MACOM Technology.
Diversification Opportunities for SolarEdge Technologies and MACOM Technology
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SolarEdge and MACOM is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding SolarEdge Technologies 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 SolarEdge Technologies 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 SolarEdge Technologies 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 SolarEdge Technologies i.e., SolarEdge Technologies and MACOM Technology go up and down completely randomly.
Pair Corralation between SolarEdge Technologies and MACOM Technology
Given the investment horizon of 90 days SolarEdge Technologies is expected to under-perform the MACOM Technology. In addition to that, SolarEdge Technologies is 1.95 times more volatile than MACOM Technology Solutions. It trades about -0.22 of its total potential returns per unit of risk. MACOM Technology Solutions is currently generating about 0.12 per unit of volatility. If you would invest 10,700 in MACOM Technology Solutions on August 23, 2024 and sell it today you would earn a total of 2,433 from holding MACOM Technology Solutions or generate 22.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SolarEdge Technologies vs. MACOM Technology Solutions
Performance |
| Timeline |
| SolarEdge Technologies |
| MACOM Technology Sol |
SolarEdge Technologies and MACOM Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SolarEdge Technologies and MACOM Technology
The main advantage of trading using opposite SolarEdge Technologies and MACOM Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SolarEdge Technologies 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.| SolarEdge Technologies vs. Small Cap Core | SolarEdge Technologies vs. Freedom Holding Corp | SolarEdge Technologies vs. Gfl Environmental Holdings | SolarEdge Technologies vs. Growth Fund Of |
| 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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