Correlation Between MACOM Technology and Tradegate
Can any of the company-specific risk be diversified away by investing in both MACOM Technology and Tradegate 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 Tradegate 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 Tradegate AG Wertpapierhandelsbank, you can compare the effects of market volatilities on MACOM Technology and Tradegate 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 Tradegate. Check out your portfolio center. Please also check ongoing floating volatility patterns of MACOM Technology and Tradegate.
Diversification Opportunities for MACOM Technology and Tradegate
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between MACOM and Tradegate is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding MACOM Technology Solutions and Tradegate AG Wertpapierhandels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tradegate AG Wertpap 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 Tradegate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tradegate AG Wertpap has no effect on the direction of MACOM Technology i.e., MACOM Technology and Tradegate go up and down completely randomly.
Pair Corralation between MACOM Technology and Tradegate
Assuming the 90 days horizon MACOM Technology Solutions is expected to under-perform the Tradegate. In addition to that, MACOM Technology is 4.48 times more volatile than Tradegate AG Wertpapierhandelsbank. It trades about -0.01 of its total potential returns per unit of risk. Tradegate AG Wertpapierhandelsbank is currently generating about 0.0 per unit of volatility. If you would invest 8,850 in Tradegate AG Wertpapierhandelsbank on September 23, 2024 and sell it today you would earn a total of 0.00 from holding Tradegate AG Wertpapierhandelsbank or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
MACOM Technology Solutions vs. Tradegate AG Wertpapierhandels
Performance |
Timeline |
MACOM Technology Sol |
Tradegate AG Wertpap |
MACOM Technology and Tradegate Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with MACOM Technology and Tradegate
The main advantage of trading using opposite MACOM Technology and Tradegate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MACOM Technology position performs unexpectedly, Tradegate 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 Tradegate will offset losses from the drop in Tradegate's long position.MACOM Technology vs. Magic Software Enterprises | MACOM Technology vs. PSI Software AG | MACOM Technology vs. FORMPIPE SOFTWARE AB | MACOM Technology vs. Nissan Chemical Corp |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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