Correlation Between MACOM Technology and SERESCO 16

Can any of the company-specific risk be diversified away by investing in both MACOM Technology and SERESCO 16 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 SERESCO 16 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 SERESCO 16, you can compare the effects of market volatilities on MACOM Technology and SERESCO 16 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 SERESCO 16. Check out your portfolio center. Please also check ongoing floating volatility patterns of MACOM Technology and SERESCO 16.

Diversification Opportunities for MACOM Technology and SERESCO 16

0.71

Correlation Coefficient

MACOM Technology  SERESCO 16

Poor diversification

The 3 months correlation between MACOM and SERESCO is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding MACOM Technology Solutions and SERESCO 16 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SERESCO 16 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 SERESCO 16. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SERESCO 16 has no effect on the direction of MACOM Technology i.e., MACOM Technology and SERESCO 16 go up and down completely randomly.

Pair Corralation between MACOM Technology and SERESCO 16

If you would invest  9,850  in MACOM Technology Solutions on April 21, 2025 and sell it today you would earn a total of  2,350  from holding MACOM Technology Solutions or generate 23.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	0.0%
Values	Daily Returns

MACOM Technology Solutions  vs.  SERESCO 16

MACOM Technology Sol

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in MACOM Technology Solutions are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, MACOM Technology reported solid returns over the last few months and may actually be approaching a breakup point.

SERESCO 16

Risk-Adjusted Performance

Good

Over the last 90 days SERESCO 16 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly weak basic indicators, SERESCO 16 reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MACOM Technology and SERESCO 16

The main advantage of trading using opposite MACOM Technology and SERESCO 16 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MACOM Technology position performs unexpectedly, SERESCO 16 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 SERESCO 16 will offset losses from the drop in SERESCO 16's long position.

The idea behind MACOM Technology Solutions and SERESCO 16 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.