Correlation Between Marvell Technology and Qualcomm

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

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

Diversification Opportunities for Marvell Technology and Qualcomm

0.84

Correlation Coefficient

Marvell Technology  Qualcomm

Very poor diversification

The 3 months correlation between Marvell and Qualcomm is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Marvell Technology and Qualcomm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qualcomm 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 Qualcomm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qualcomm has no effect on the direction of Marvell Technology i.e., Marvell Technology and Qualcomm go up and down completely randomly.

Pair Corralation between Marvell Technology and Qualcomm

Assuming the 90 days trading horizon Marvell Technology is expected to under-perform the Qualcomm. In addition to that, Marvell Technology is 2.49 times more volatile than Qualcomm. It trades about -0.17 of its total potential returns per unit of risk. Qualcomm is currently generating about -0.03 per unit of volatility. If you would invest  8,068  in Qualcomm on December 26, 2024 and sell it today you would lose (312.00) from holding Qualcomm or give up 3.87% of portfolio value over 90 days.

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

Marvell Technology  vs.  Qualcomm

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 uncertain 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.

Qualcomm

Risk-Adjusted Performance

Very Weak

Over the last 90 days Qualcomm has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Qualcomm is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Marvell Technology and Qualcomm

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

The idea behind Marvell Technology and Qualcomm 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.