Correlation Between MACOM Technology and Intel

Can any of the company-specific risk be diversified away by investing in both MACOM Technology and Intel 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 Intel 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 Intel 31 percent, you can compare the effects of market volatilities on MACOM Technology and Intel 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 Intel. Check out your portfolio center. Please also check ongoing floating volatility patterns of MACOM Technology and Intel.

Diversification Opportunities for MACOM Technology and Intel

-0.05

Correlation Coefficient

MACOM Technology  Intel

Good diversification

The 3 months correlation between MACOM and Intel is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding MACOM Technology Solutions and Intel 31 percent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel 31 percent 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 Intel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intel 31 percent has no effect on the direction of MACOM Technology i.e., MACOM Technology and Intel go up and down completely randomly.

Pair Corralation between MACOM Technology and Intel

Given the investment horizon of 90 days MACOM Technology Solutions is expected to generate 1.57 times more return on investment than Intel. However, MACOM Technology is 1.57 times more volatile than Intel 31 percent. It trades about 0.09 of its potential returns per unit of risk. Intel 31 percent is currently generating about -0.01 per unit of risk. If you would invest  8,481  in MACOM Technology Solutions on September 2, 2024 and sell it today you would earn a total of  4,801  from holding MACOM Technology Solutions or generate 56.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.18%
Values	Daily Returns

MACOM Technology Solutions  vs.  Intel 31 percent

MACOM Technology Sol

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MACOM Technology Solutions are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, MACOM Technology demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Intel 31 percent

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intel 31 percent has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Intel is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with MACOM Technology and Intel

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

The idea behind MACOM Technology Solutions and Intel 31 percent 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.