Correlation Between MACOM Technology and Gaztransport Technigaz

Can any of the company-specific risk be diversified away by investing in both MACOM Technology and Gaztransport Technigaz 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 Gaztransport Technigaz 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 Gaztransport Technigaz SA, you can compare the effects of market volatilities on MACOM Technology and Gaztransport Technigaz 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 Gaztransport Technigaz. Check out your portfolio center. Please also check ongoing floating volatility patterns of MACOM Technology and Gaztransport Technigaz.

Diversification Opportunities for MACOM Technology and Gaztransport Technigaz

-0.25

Correlation Coefficient

MACOM Technology  Gaztransport Technigaz

Very good diversification

The 3 months correlation between MACOM and Gaztransport is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding MACOM Technology Solutions and Gaztransport Technigaz SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport Technigaz 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 Gaztransport Technigaz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaztransport Technigaz has no effect on the direction of MACOM Technology i.e., MACOM Technology and Gaztransport Technigaz go up and down completely randomly.

Pair Corralation between MACOM Technology and Gaztransport Technigaz

Assuming the 90 days horizon MACOM Technology Solutions is expected to under-perform the Gaztransport Technigaz. But the stock apears to be less risky and, when comparing its historical volatility, MACOM Technology Solutions is 1.49 times less risky than Gaztransport Technigaz. The stock trades about -0.44 of its potential returns per unit of risk. The Gaztransport Technigaz SA is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  13,660  in Gaztransport Technigaz SA on December 10, 2024 and sell it today you would earn a total of  420.00  from holding Gaztransport Technigaz SA or generate 3.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

MACOM Technology Solutions  vs.  Gaztransport Technigaz SA

MACOM Technology Sol

Risk-Adjusted Performance

Very Weak

Over the last 90 days MACOM Technology Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Gaztransport Technigaz

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gaztransport Technigaz SA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Gaztransport Technigaz may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with MACOM Technology and Gaztransport Technigaz

The main advantage of trading using opposite MACOM Technology and Gaztransport Technigaz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MACOM Technology position performs unexpectedly, Gaztransport Technigaz 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 Gaztransport Technigaz will offset losses from the drop in Gaztransport Technigaz's long position.

The idea behind MACOM Technology Solutions and Gaztransport Technigaz SA 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.