Correlation Between Nano Labs and Marvell Technology

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

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

Diversification Opportunities for Nano Labs and Marvell Technology

0.18

Correlation Coefficient

Nano Labs  Marvell Technology

Average diversification

The 3 months correlation between Nano and Marvell is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Nano Labs and Marvell Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marvell Technology and Nano Labs 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 Nano Labs are associated (or correlated) with Marvell Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marvell Technology has no effect on the direction of Nano Labs i.e., Nano Labs and Marvell Technology go up and down completely randomly.

Pair Corralation between Nano Labs and Marvell Technology

Allowing for the 90-day total investment horizon Nano Labs is expected to generate 3.31 times more return on investment than Marvell Technology. However, Nano Labs is 3.31 times more volatile than Marvell Technology Group. It trades about 0.04 of its potential returns per unit of risk. Marvell Technology Group is currently generating about 0.07 per unit of risk. If you would invest  1,030  in Nano Labs on December 4, 2024 and sell it today you would lose (484.00) from holding Nano Labs or give up 46.99% of portfolio value over 90 days.

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

Nano Labs  vs.  Marvell Technology Group

Nano Labs

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nano Labs has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Etf'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 ETF investors.

Marvell Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Marvell Technology Group 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 quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Nano Labs and Marvell Technology

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

The idea behind Nano Labs and Marvell Technology Group 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.