Correlation Between Marcus and Reservoir Media

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

By analyzing existing cross correlation between Marcus and Reservoir Media, you can compare the effects of market volatilities on Marcus and Reservoir Media 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 Reservoir Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marcus and Reservoir Media.

Diversification Opportunities for Marcus and Reservoir Media

-0.54

Correlation Coefficient

Marcus  Reservoir Media

Excellent diversification

The 3 months correlation between Marcus and Reservoir is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Marcus and Reservoir Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reservoir Media 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 Reservoir Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reservoir Media has no effect on the direction of Marcus i.e., Marcus and Reservoir Media go up and down completely randomly.

Pair Corralation between Marcus and Reservoir Media

Considering the 90-day investment horizon Marcus is expected to under-perform the Reservoir Media. In addition to that, Marcus is 1.08 times more volatile than Reservoir Media. It trades about -0.23 of its total potential returns per unit of risk. Reservoir Media is currently generating about 0.09 per unit of volatility. If you would invest  728.00  in Reservoir Media on March 4, 2024 and sell it today you would earn a total of  76.00  from holding Reservoir Media or generate 10.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Marcus  vs.  Reservoir Media

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 July 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Reservoir Media

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Reservoir Media are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Reservoir Media may actually be approaching a critical reversion point that can send shares even higher in July 2024.

Pair Trading with Marcus and Reservoir Media

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

The idea behind Marcus and Reservoir Media 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.