Correlation Between Veeco Instruments and Marvell Technology
Can any of the company-specific risk be diversified away by investing in both Veeco Instruments and Marvell 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 Veeco Instruments and Marvell Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Veeco Instruments and Marvell Technology Group, you can compare the effects of market volatilities on Veeco Instruments and Marvell 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 Veeco Instruments with a short position of Marvell Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Veeco Instruments and Marvell Technology.
Diversification Opportunities for Veeco Instruments and Marvell Technology
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Veeco and Marvell is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Veeco Instruments and Marvell Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marvell Technology and Veeco Instruments 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 Veeco Instruments are associated (or correlated) with Marvell Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marvell Technology has no effect on the direction of Veeco Instruments i.e., Veeco Instruments and Marvell Technology go up and down completely randomly.
Pair Corralation between Veeco Instruments and Marvell Technology
Given the investment horizon of 90 days Veeco Instruments is expected to under-perform the Marvell Technology. But the stock apears to be less risky and, when comparing its historical volatility, Veeco Instruments is 1.15 times less risky than Marvell Technology. The stock trades about -0.15 of its potential returns per unit of risk. The Marvell Technology Group is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 8,344 in Marvell Technology Group on August 29, 2024 and sell it today you would earn a total of 970.00 from holding Marvell Technology Group or generate 11.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Veeco Instruments vs. Marvell Technology Group
Performance |
| Timeline |
| Veeco Instruments |
| Marvell Technology |
Veeco Instruments and Marvell Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Veeco Instruments and Marvell Technology
The main advantage of trading using opposite Veeco Instruments and Marvell Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Veeco Instruments position performs unexpectedly, Marvell 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 Marvell Technology will offset losses from the drop in Marvell Technology's long position.The idea behind Veeco Instruments and Marvell Technology 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.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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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