Correlation Between Marvell Technology and PagSeguro Digital

Can any of the company-specific risk be diversified away by investing in both Marvell Technology and PagSeguro Digital 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 Marvell Technology and PagSeguro Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Marvell Technology and PagSeguro Digital

-0.64

Correlation Coefficient

Marvell Technology  PagSeguro Digital

Excellent diversification

The 3 months correlation between Marvell and PagSeguro is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Marvell Technology and PagSeguro Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PagSeguro Digital and Marvell 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 Marvell Technology are associated (or correlated) with PagSeguro Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PagSeguro Digital has no effect on the direction of Marvell Technology i.e., Marvell Technology and PagSeguro Digital go up and down completely randomly.

Pair Corralation between Marvell Technology and PagSeguro Digital

Assuming the 90 days trading horizon Marvell Technology is expected to under-perform the PagSeguro Digital. In addition to that, Marvell Technology is 1.6 times more volatile than PagSeguro Digital. It trades about -0.16 of its total potential returns per unit of risk. PagSeguro Digital is currently generating about 0.11 per unit of volatility. If you would invest  808.00  in PagSeguro Digital on December 25, 2024 and sell it today you would earn a total of  156.00  from holding PagSeguro Digital or generate 19.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

Marvell Technology  vs.  PagSeguro Digital

Marvell Technology

Risk-Adjusted Performance

Very Weak

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

PagSeguro Digital

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PagSeguro Digital are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, PagSeguro Digital sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Marvell Technology and PagSeguro Digital

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

The idea behind Marvell Technology and PagSeguro Digital 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.