Correlation Between MaxLinear and EMCORE
Can any of the company-specific risk be diversified away by investing in both MaxLinear and EMCORE 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 EMCORE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MaxLinear and EMCORE, you can compare the effects of market volatilities on MaxLinear and EMCORE 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 EMCORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of MaxLinear and EMCORE.
Diversification Opportunities for MaxLinear and EMCORE
Significant diversification
The 3 months correlation between MaxLinear and EMCORE is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding MaxLinear and EMCORE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMCORE 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 EMCORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMCORE has no effect on the direction of MaxLinear i.e., MaxLinear and EMCORE go up and down completely randomly.
Pair Corralation between MaxLinear and EMCORE
Considering the 90-day investment horizon MaxLinear is expected to generate 0.79 times more return on investment than EMCORE. However, MaxLinear is 1.27 times less risky than EMCORE. It trades about 0.21 of its potential returns per unit of risk. EMCORE is currently generating about -0.37 per unit of risk. If you would invest 1,782 in MaxLinear on January 19, 2024 and sell it today you would earn a total of 245.00 from holding MaxLinear or generate 13.75% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
MaxLinear vs. EMCORE
Performance |
Timeline |
MaxLinear |
EMCORE |
MaxLinear and EMCORE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with MaxLinear and EMCORE
The main advantage of trading using opposite MaxLinear and EMCORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MaxLinear position performs unexpectedly, EMCORE 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 EMCORE will offset losses from the drop in EMCORE's long position.MaxLinear vs. ASE Industrial Holding | MaxLinear vs. Himax Technologies | MaxLinear vs. United Microelectronics | MaxLinear vs. SemiLEDS |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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