Correlation Between Marcus and Everi Holdings

Can any of the company-specific risk be diversified away by investing in both Marcus and Everi Holdings 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 Marcus and Everi Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Marcus and Everi Holdings

0.64

Correlation Coefficient

Marcus  Everi Holdings

Poor diversification

The 3 months correlation between Marcus and Everi is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Marcus and Everi Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Everi Holdings and Marcus 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 Marcus are associated (or correlated) with Everi Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Everi Holdings has no effect on the direction of Marcus i.e., Marcus and Everi Holdings go up and down completely randomly.

Pair Corralation between Marcus and Everi Holdings

Considering the 90-day investment horizon Marcus is expected to generate 1.19 times more return on investment than Everi Holdings. However, Marcus is 1.19 times more volatile than Everi Holdings. It trades about -0.3 of its potential returns per unit of risk. Everi Holdings is currently generating about -0.41 per unit of risk. If you would invest  1,369  in Marcus on February 6, 2024 and sell it today you would lose (178.00) from holding Marcus or give up 13.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Marcus  vs.  Everi Holdings

Marcus

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Marcus has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in June 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Everi Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Everi Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in June 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Marcus and Everi Holdings

The main advantage of trading using opposite Marcus and Everi Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marcus position performs unexpectedly, Everi Holdings 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 Everi Holdings will offset losses from the drop in Everi Holdings' long position.

The idea behind Marcus and Everi Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.