Correlation Between Marine Bancorp and American Hotel
Can any of the company-specific risk be diversified away by investing in both Marine Bancorp and American Hotel 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 Marine Bancorp and American Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marine Bancorp of and American Hotel Income, you can compare the effects of market volatilities on Marine Bancorp and American Hotel 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 Marine Bancorp with a short position of American Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marine Bancorp and American Hotel.
Diversification Opportunities for Marine Bancorp and American Hotel
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Marine and American is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Marine Bancorp of and American Hotel Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Hotel Income and Marine Bancorp 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 Marine Bancorp of are associated (or correlated) with American Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Hotel Income has no effect on the direction of Marine Bancorp i.e., Marine Bancorp and American Hotel go up and down completely randomly.
Pair Corralation between Marine Bancorp and American Hotel
Given the investment horizon of 90 days Marine Bancorp of is expected to generate 0.6 times more return on investment than American Hotel. However, Marine Bancorp of is 1.66 times less risky than American Hotel. It trades about 0.03 of its potential returns per unit of risk. American Hotel Income is currently generating about -0.03 per unit of risk. If you would invest 2,860 in Marine Bancorp of on September 5, 2024 and sell it today you would earn a total of 1,090 from holding Marine Bancorp of or generate 38.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.37% |
| Values | Daily Returns |
Marine Bancorp of vs. American Hotel Income
Performance |
| Timeline |
| Marine Bancorp |
| American Hotel Income |
Marine Bancorp and American Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marine Bancorp and American Hotel
The main advantage of trading using opposite Marine Bancorp and American Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marine Bancorp position performs unexpectedly, American Hotel 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 American Hotel will offset losses from the drop in American Hotel's long position.| Marine Bancorp vs. American Hotel Income | Marine Bancorp vs. The Cheesecake Factory | Marine Bancorp vs. Biglari Holdings | Marine Bancorp vs. CapitaLand Investment Limited |
| American Hotel vs. Ashford Hospitality Trust | American Hotel vs. Ashford Hospitality Trust | American Hotel vs. Ashford Hospitality Trust | American Hotel vs. Ashford Hospitality Trust |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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