Correlation Between Marchex and Fortune Brands
Can any of the company-specific risk be diversified away by investing in both Marchex and Fortune Brands 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 Fortune Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marchex and Fortune Brands Home, you can compare the effects of market volatilities on Marchex and Fortune Brands 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 Fortune Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marchex and Fortune Brands.
Diversification Opportunities for Marchex and Fortune Brands
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Marchex and Fortune is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Marchex and Fortune Brands Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortune Brands Home 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 Fortune Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortune Brands Home has no effect on the direction of Marchex i.e., Marchex and Fortune Brands go up and down completely randomly.
Pair Corralation between Marchex and Fortune Brands
Given the investment horizon of 90 days Marchex is expected to generate 0.13 times more return on investment than Fortune Brands. However, Marchex is 7.93 times less risky than Fortune Brands. It trades about 0.03 of its potential returns per unit of risk. Fortune Brands Home is currently generating about -0.25 per unit of risk. If you would invest 165.00 in Marchex on September 14, 2024 and sell it today you would earn a total of 42.00 from holding Marchex or generate 25.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 2.63% |
| Values | Daily Returns |
Marchex vs. Fortune Brands Home
Performance |
| Timeline |
| Marchex |
| Fortune Brands Home |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Marchex and Fortune Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marchex and Fortune Brands
The main advantage of trading using opposite Marchex and Fortune Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marchex position performs unexpectedly, Fortune Brands 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 Fortune Brands will offset losses from the drop in Fortune Brands' long position.| Marchex vs. Mirriad Advertising plc | Marchex vs. INEO Tech Corp | Marchex vs. Kidoz Inc | Marchex vs. Snipp Interactive |
| Fortune Brands vs. Marchex | Fortune Brands vs. Deluxe | Fortune Brands vs. Boston Omaha Corp | Fortune Brands vs. Q2 Holdings |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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