Correlation Between American Picture and Marcus
Can any of the company-specific risk be diversified away by investing in both American Picture and Marcus 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 American Picture and Marcus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Picture House and Marcus, you can compare the effects of market volatilities on American Picture and Marcus 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 American Picture with a short position of Marcus. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Picture and Marcus.
Diversification Opportunities for American Picture and Marcus
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between American and Marcus is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding American Picture House and Marcus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marcus and American Picture 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 American Picture House are associated (or correlated) with Marcus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marcus has no effect on the direction of American Picture i.e., American Picture and Marcus go up and down completely randomly.
Pair Corralation between American Picture and Marcus
Given the investment horizon of 90 days American Picture House is expected to generate 5.2 times more return on investment than Marcus. However, American Picture is 5.2 times more volatile than Marcus. It trades about 0.05 of its potential returns per unit of risk. Marcus is currently generating about 0.11 per unit of risk. If you would invest 30.00 in American Picture House on August 26, 2024 and sell it today you would lose (1.00) from holding American Picture House or give up 3.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Picture House vs. Marcus
Performance |
| Timeline |
| American Picture House |
| Marcus |
American Picture and Marcus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Picture and Marcus
The main advantage of trading using opposite American Picture and Marcus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Picture position performs unexpectedly, Marcus 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 Marcus will offset losses from the drop in Marcus' long position.The idea behind American Picture House and Marcus 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.| Marcus vs. News Corp A | Marcus vs. Liberty Media | Marcus vs. Warner Music Group | Marcus vs. Fox Corp Class |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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