Correlation Between MACOM Technology and FEDEX
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By analyzing existing cross correlation between MACOM Technology Solutions and FEDEX P 42, you can compare the effects of market volatilities on MACOM Technology and FEDEX 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 FEDEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of MACOM Technology and FEDEX.
Diversification Opportunities for MACOM Technology and FEDEX
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between MACOM and FEDEX is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding MACOM Technology Solutions and FEDEX P 42 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FEDEX P 42 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 FEDEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FEDEX P 42 has no effect on the direction of MACOM Technology i.e., MACOM Technology and FEDEX go up and down completely randomly.
Pair Corralation between MACOM Technology and FEDEX
Given the investment horizon of 90 days MACOM Technology Solutions is expected to generate 2.4 times more return on investment than FEDEX. However, MACOM Technology is 2.4 times more volatile than FEDEX P 42. It trades about 0.08 of its potential returns per unit of risk. FEDEX P 42 is currently generating about 0.0 per unit of risk. If you would invest 6,233 in MACOM Technology Solutions on September 25, 2024 and sell it today you would earn a total of 7,398 from holding MACOM Technology Solutions or generate 118.69% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 90.74% |
Values | Daily Returns |
MACOM Technology Solutions vs. FEDEX P 42
Performance |
Timeline |
MACOM Technology Sol |
FEDEX P 42 |
MACOM Technology and FEDEX Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with MACOM Technology and FEDEX
The main advantage of trading using opposite MACOM Technology and FEDEX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MACOM Technology position performs unexpectedly, FEDEX 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 FEDEX will offset losses from the drop in FEDEX's long position.The idea behind MACOM Technology Solutions and FEDEX P 42 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.FEDEX vs. MagnaChip Semiconductor | FEDEX vs. Globalfoundries | FEDEX vs. Topbuild Corp | FEDEX vs. MACOM Technology Solutions |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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