Correlation Between Marchex and Cardlytics
Can any of the company-specific risk be diversified away by investing in both Marchex and Cardlytics 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 Cardlytics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marchex and Cardlytics, you can compare the effects of market volatilities on Marchex and Cardlytics 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 Cardlytics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marchex and Cardlytics.
Diversification Opportunities for Marchex and Cardlytics
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Marchex and Cardlytics is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Marchex and Cardlytics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardlytics 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 Cardlytics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardlytics has no effect on the direction of Marchex i.e., Marchex and Cardlytics go up and down completely randomly.
Pair Corralation between Marchex and Cardlytics
Given the investment horizon of 90 days Marchex is expected to under-perform the Cardlytics. But the stock apears to be less risky and, when comparing its historical volatility, Marchex is 1.9 times less risky than Cardlytics. The stock trades about -0.01 of its potential returns per unit of risk. The Cardlytics is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 383.00 in Cardlytics on August 24, 2024 and sell it today you would lose (3.00) from holding Cardlytics or give up 0.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marchex vs. Cardlytics
Performance |
| Timeline |
| Marchex |
| Cardlytics |
Marchex and Cardlytics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marchex and Cardlytics
The main advantage of trading using opposite Marchex and Cardlytics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marchex position performs unexpectedly, Cardlytics 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 Cardlytics will offset losses from the drop in Cardlytics' long position.| Marchex vs. Entravision Communications | Marchex vs. Direct Digital Holdings | Marchex vs. Cimpress NV | Marchex vs. Townsquare Media |
| Cardlytics vs. Criteo Sa | Cardlytics vs. Deluxe | Cardlytics vs. Emerald Expositions Events | Cardlytics vs. Marchex |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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