Correlation Between Advanced Micro and Analog Devices

By analyzing existing cross correlation between Advanced Micro Devices and Analog Devices you can compare the effects of market volatilities on Advanced Micro and Analog Devices 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 Advanced Micro with a short position of Analog Devices. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Micro and Analog Devices.

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Can any of the company-specific risk be diversified away by investing in both Advanced Micro and Analog Devices at the same time? Although using correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combing Advanced Micro and Analog Devices into the same portfolio which is an essential part of fundamental portfolio management process.

Diversification Opportunities for Advanced Micro and Analog Devices

0.67
Correlation
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Poor diversification

The 3 months correlation between Advanced and Analog is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Micro Devices Inc and Analog Devices Inc in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Analog Devices and Advanced Micro 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 Advanced Micro Devices are associated (or correlated) with Analog Devices. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Analog Devices has no effect on the direction of Advanced Micro i.e. Advanced Micro and Analog Devices go up and down completely randomly.

Pair Corralation between Advanced Micro and Analog Devices

Considering 30-days investment horizon, Advanced Micro Devices is expected to generate 0.94 times more return on investment than Analog Devices. However, Advanced Micro Devices is 1.07 times less risky than Analog Devices. It trades about 0.07 of its potential returns per unit of risk. Analog Devices is currently generating about 0.03 per unit of risk. If you would invest  4,520  in Advanced Micro Devices on April 28, 2020 and sell it today you would earn a total of  654.00  from holding Advanced Micro Devices or generate 14.47% return on investment over 30 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Advanced Micro Devices Inc  vs.  Analog Devices Inc

 Performance (%) 
      Timeline 
Advanced Micro Devices 
44

Advanced Micro Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Advanced Micro Devices are ranked lower than 4 (%) of all global equities and portfolios over the last 30 days. In spite of rather unsteady fundamental drivers, Advanced Micro exhibited solid returns over the last few months and may actually be approaching a breakup point.
Analog Devices 
22

Analog Devices Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Analog Devices are ranked lower than 2 (%) of all global equities and portfolios over the last 30 days. Despite nearly unsteady fundamental indicators, Analog Devices may actually be approaching a critical reversion point that can send shares even higher in June 2020.

Advanced Micro and Analog Devices Volatility Contrast

 Predicted Return Density 
      Returns 
Check out your portfolio center. Please also try Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.


 
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