Correlation Between MaxLinear and Advanced Micro
Can any of the company-specific risk be diversified away by investing in both MaxLinear and Advanced Micro 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 MaxLinear and Advanced Micro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MaxLinear and Advanced Micro Devices, you can compare the effects of market volatilities on MaxLinear and Advanced Micro 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 MaxLinear with a short position of Advanced Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of MaxLinear and Advanced Micro.
Diversification Opportunities for MaxLinear and Advanced Micro
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MaxLinear and Advanced is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding MaxLinear and Advanced Micro Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Micro Devices and MaxLinear 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 MaxLinear are associated (or correlated) with Advanced Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Micro Devices has no effect on the direction of MaxLinear i.e., MaxLinear and Advanced Micro go up and down completely randomly.
Pair Corralation between MaxLinear and Advanced Micro
Considering the 90-day investment horizon MaxLinear is expected to under-perform the Advanced Micro. In addition to that, MaxLinear is 1.17 times more volatile than Advanced Micro Devices. It trades about -0.03 of its total potential returns per unit of risk. Advanced Micro Devices is currently generating about 0.14 per unit of volatility. If you would invest 10,572 in Advanced Micro Devices on December 29, 2023 and sell it today you would earn a total of 7,477 from holding Advanced Micro Devices or generate 70.72% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
MaxLinear vs. Advanced Micro Devices
Performance |
Timeline |
MaxLinear |
Advanced Micro Devices |
MaxLinear and Advanced Micro Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with MaxLinear and Advanced Micro
The main advantage of trading using opposite MaxLinear and Advanced Micro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MaxLinear position performs unexpectedly, Advanced Micro 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 Advanced Micro will offset losses from the drop in Advanced Micro's long position.MaxLinear vs. Usio Inc | MaxLinear vs. The Mosaic | MaxLinear vs. Hudson Technologies | MaxLinear vs. CF Industries Holdings |
Advanced Micro vs. Vishay Intertechnology | Advanced Micro vs. Transphorm Technology | Advanced Micro vs. ON Semiconductor | Advanced Micro vs. Rocky Brands |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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