Correlation Between Marchex and Biglari Holdings
Can any of the company-specific risk be diversified away by investing in both Marchex and Biglari Holdings 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 Marchex and Biglari Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marchex and Biglari Holdings, you can compare the effects of market volatilities on Marchex and Biglari Holdings 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 Marchex with a short position of Biglari Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marchex and Biglari Holdings.
Diversification Opportunities for Marchex and Biglari Holdings
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Marchex and Biglari is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Marchex and Biglari Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biglari Holdings and Marchex 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 Marchex are associated (or correlated) with Biglari Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biglari Holdings has no effect on the direction of Marchex i.e., Marchex and Biglari Holdings go up and down completely randomly.
Pair Corralation between Marchex and Biglari Holdings
Given the investment horizon of 90 days Marchex is expected to under-perform the Biglari Holdings. In addition to that, Marchex is 1.6 times more volatile than Biglari Holdings. It trades about -0.02 of its total potential returns per unit of risk. Biglari Holdings is currently generating about 0.16 per unit of volatility. If you would invest 17,201 in Biglari Holdings on September 3, 2024 and sell it today you would earn a total of 3,842 from holding Biglari Holdings or generate 22.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marchex vs. Biglari Holdings
Performance |
| Timeline |
| Marchex |
| Biglari Holdings |
Marchex and Biglari Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marchex and Biglari Holdings
The main advantage of trading using opposite Marchex and Biglari Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marchex position performs unexpectedly, Biglari Holdings 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 Biglari Holdings will offset losses from the drop in Biglari Holdings' long position.| Marchex vs. Entravision Communications | Marchex vs. Direct Digital Holdings | Marchex vs. Cimpress NV | Marchex vs. Townsquare Media |
| Biglari Holdings vs. Highway Holdings Limited | Biglari Holdings vs. QCR Holdings | Biglari Holdings vs. Partner Communications | Biglari Holdings vs. Acumen Pharmaceuticals |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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