Correlation Between Analog Devices and Marvell Technology
Can any of the company-specific risk be diversified away by investing in both Analog Devices 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 Analog Devices and Marvell Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Analog Devices and Marvell Technology Group, you can compare the effects of market volatilities on Analog Devices 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 Analog Devices with a short position of Marvell Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Analog Devices and Marvell Technology.
Diversification Opportunities for Analog Devices and Marvell Technology
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Analog and Marvell is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Analog Devices and Marvell Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marvell Technology and Analog Devices 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 Analog Devices 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 Analog Devices i.e., Analog Devices and Marvell Technology go up and down completely randomly.
Pair Corralation between Analog Devices and Marvell Technology
Considering the 90-day investment horizon Analog Devices is expected to generate 0.76 times more return on investment than Marvell Technology. However, Analog Devices is 1.31 times less risky than Marvell Technology. It trades about 0.06 of its potential returns per unit of risk. Marvell Technology Group is currently generating about -0.05 per unit of risk. If you would invest 19,063 in Analog Devices on January 25, 2024 and sell it today you would earn a total of 447.00 from holding Analog Devices or generate 2.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Analog Devices vs. Marvell Technology Group
Performance |
| Timeline |
| Analog Devices |
| Marvell Technology |
Analog Devices and Marvell Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Analog Devices and Marvell Technology
The main advantage of trading using opposite Analog Devices and Marvell Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Analog Devices 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.| Analog Devices vs. NXP Semiconductors NV | Analog Devices vs. Qualcomm Incorporated | Analog Devices vs. Broadcom | Analog Devices vs. Microchip Technology |
| Marvell Technology vs. NVIDIA | Marvell Technology vs. Intel | Marvell Technology vs. Taiwan Semiconductor Manufacturing | Marvell Technology vs. Micron Technology |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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