Correlation Between Global E and Marchex
Can any of the company-specific risk be diversified away by investing in both Global E and Marchex 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 Global E and Marchex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global E Online and Marchex, you can compare the effects of market volatilities on Global E and Marchex 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 Global E with a short position of Marchex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global E and Marchex.
Diversification Opportunities for Global E and Marchex
Average diversification
The 3 months correlation between Global and Marchex is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Global E Online and Marchex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marchex and Global E 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 Global E Online are associated (or correlated) with Marchex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marchex has no effect on the direction of Global E i.e., Global E and Marchex go up and down completely randomly.
Pair Corralation between Global E and Marchex
Given the investment horizon of 90 days Global E Online is expected to under-perform the Marchex. But the stock apears to be less risky and, when comparing its historical volatility, Global E Online is 1.38 times less risky than Marchex. The stock trades about -0.1 of its potential returns per unit of risk. The Marchex is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 146.00 in Marchex on February 3, 2024 and sell it today you would lose (8.00) from holding Marchex or give up 5.48% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Global E Online vs. Marchex
Performance |
Timeline |
Global E Online |
Marchex |
Global E and Marchex Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Global E and Marchex
The main advantage of trading using opposite Global E and Marchex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global E position performs unexpectedly, Marchex 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 Marchex will offset losses from the drop in Marchex's long position.Global E vs. Vipshop Holdings Limited | Global E vs. JD Inc Adr | Global E vs. Jumia Technologies AG | Global E vs. Baozun Inc |
Marchex vs. Deluxe | Marchex vs. Cimpress NV | Marchex vs. Ziff Davis | Marchex vs. Entravision Communications |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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