Correlation Between Analog Devices and Marti Technologies

Can any of the company-specific risk be diversified away by investing in both Analog Devices and Marti Technologies 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 Analog Devices and Marti Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Analog Devices and Marti Technologies, you can compare the effects of market volatilities on Analog Devices and Marti Technologies 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 Analog Devices with a short position of Marti Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Analog Devices and Marti Technologies.

Diversification Opportunities for Analog Devices and Marti Technologies

-0.02

Correlation Coefficient

Analog Devices  Marti Technologies

Good diversification

The 3 months correlation between Analog and Marti is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Analog Devices and Marti Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marti Technologies and Analog Devices 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 Analog Devices are associated (or correlated) with Marti Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marti Technologies has no effect on the direction of Analog Devices i.e., Analog Devices and Marti Technologies go up and down completely randomly.

Pair Corralation between Analog Devices and Marti Technologies

Considering the 90-day investment horizon Analog Devices is expected to generate 68.5 times less return on investment than Marti Technologies. But when comparing it to its historical volatility, Analog Devices is 3.05 times less risky than Marti Technologies. It trades about 0.01 of its potential returns per unit of risk. Marti Technologies is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  221.00  in Marti Technologies on September 3, 2024 and sell it today you would earn a total of  121.00  from holding Marti Technologies or generate 54.75% return on investment over 90 days.

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

Analog Devices  vs.  Marti Technologies

Analog Devices

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Analog Devices has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental indicators, Analog Devices is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Marti Technologies

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Marti Technologies are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Marti Technologies unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Analog Devices and Marti Technologies

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

The idea behind Analog Devices and Marti Technologies 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.

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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.