Correlation Between Marvel Discovery and Leons Furniture
Can any of the company-specific risk be diversified away by investing in both Marvel Discovery and Leons Furniture 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 Marvel Discovery and Leons Furniture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marvel Discovery Corp and Leons Furniture Limited, you can compare the effects of market volatilities on Marvel Discovery and Leons Furniture 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 Marvel Discovery with a short position of Leons Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marvel Discovery and Leons Furniture.
Diversification Opportunities for Marvel Discovery and Leons Furniture
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Marvel and Leons is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Marvel Discovery Corp and Leons Furniture Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leons Furniture and Marvel Discovery 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 Marvel Discovery Corp are associated (or correlated) with Leons Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leons Furniture has no effect on the direction of Marvel Discovery i.e., Marvel Discovery and Leons Furniture go up and down completely randomly.
Pair Corralation between Marvel Discovery and Leons Furniture
Assuming the 90 days trading horizon Marvel Discovery Corp is expected to generate 21.61 times more return on investment than Leons Furniture. However, Marvel Discovery is 21.61 times more volatile than Leons Furniture Limited. It trades about 0.11 of its potential returns per unit of risk. Leons Furniture Limited is currently generating about -0.2 per unit of risk. If you would invest 1.50 in Marvel Discovery Corp on October 22, 2024 and sell it today you would earn a total of 0.00 from holding Marvel Discovery Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Marvel Discovery Corp vs. Leons Furniture Limited
Performance |
| Timeline |
| Marvel Discovery Corp |
| Leons Furniture |
Marvel Discovery and Leons Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marvel Discovery and Leons Furniture
The main advantage of trading using opposite Marvel Discovery and Leons Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marvel Discovery position performs unexpectedly, Leons Furniture 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 Leons Furniture will offset losses from the drop in Leons Furniture's long position.| Marvel Discovery vs. NorthWest Healthcare Properties | Marvel Discovery vs. Reliq Health Technologies | Marvel Discovery vs. iSign Media Solutions | Marvel Discovery vs. MTY Food Group |
| Leons Furniture vs. High Liner Foods | Leons Furniture vs. Richelieu Hardware | Leons Furniture vs. North West | Leons Furniture vs. Toromont Industries |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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