Correlation Between Broadstone Net and Marchex
Can any of the company-specific risk be diversified away by investing in both Broadstone Net 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 Broadstone Net and Marchex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Broadstone Net Lease and Marchex, you can compare the effects of market volatilities on Broadstone Net 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 Broadstone Net with a short position of Marchex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Broadstone Net and Marchex.
Diversification Opportunities for Broadstone Net and Marchex
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Broadstone and Marchex is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Broadstone Net Lease and Marchex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marchex and Broadstone Net 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 Broadstone Net Lease 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 Broadstone Net i.e., Broadstone Net and Marchex go up and down completely randomly.
Pair Corralation between Broadstone Net and Marchex
Considering the 90-day investment horizon Broadstone Net is expected to generate 2.45 times less return on investment than Marchex. But when comparing it to its historical volatility, Broadstone Net Lease is 2.67 times less risky than Marchex. It trades about 0.05 of its potential returns per unit of risk. Marchex is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 144.00 in Marchex on September 3, 2024 and sell it today you would earn a total of 38.00 from holding Marchex or generate 26.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Broadstone Net Lease vs. Marchex
Performance |
| Timeline |
| Broadstone Net Lease |
| Marchex |
Broadstone Net and Marchex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Broadstone Net and Marchex
The main advantage of trading using opposite Broadstone Net and Marchex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Broadstone Net 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.| Broadstone Net vs. Armada Hflr Pr | Broadstone Net vs. Brightspire Capital | Broadstone Net vs. Safehold | Broadstone Net vs. Essential Properties Realty |
| Marchex vs. Entravision Communications | Marchex vs. Direct Digital Holdings | Marchex vs. Cimpress NV | Marchex vs. Townsquare Media |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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