Correlation Between Chicken Soup and Marcus
Can any of the company-specific risk be diversified away by investing in both Chicken Soup 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 Chicken Soup and Marcus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chicken Soup For and Marcus, you can compare the effects of market volatilities on Chicken Soup 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 Chicken Soup with a short position of Marcus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chicken Soup and Marcus.
Diversification Opportunities for Chicken Soup and Marcus
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chicken and Marcus is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Chicken Soup For and Marcus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marcus and Chicken Soup 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 Chicken Soup For 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 Chicken Soup i.e., Chicken Soup and Marcus go up and down completely randomly.
Pair Corralation between Chicken Soup and Marcus
Assuming the 90 days horizon Chicken Soup For is expected to generate 8.72 times more return on investment than Marcus. However, Chicken Soup is 8.72 times more volatile than Marcus. It trades about 0.07 of its potential returns per unit of risk. Marcus is currently generating about 0.11 per unit of risk. If you would invest 1.00 in Chicken Soup For on September 2, 2024 and sell it today you would lose (0.21) from holding Chicken Soup For or give up 21.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 56.05% |
| Values | Daily Returns |
Chicken Soup For vs. Marcus
Performance |
| Timeline |
| Chicken Soup For |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Marcus |
Chicken Soup and Marcus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chicken Soup and Marcus
The main advantage of trading using opposite Chicken Soup and Marcus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chicken Soup 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.| Chicken Soup vs. Pagaya Technologies Ltd | Chicken Soup vs. Intelligent Living Application | Chicken Soup vs. Starbox Group Holdings |
| Marcus vs. ADTRAN Inc | Marcus vs. Belden Inc | Marcus vs. ADC Therapeutics SA | Marcus vs. Comtech Telecommunications Corp |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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