Correlation Between Marchex and Intelligent Group
Can any of the company-specific risk be diversified away by investing in both Marchex and Intelligent Group 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 Intelligent Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marchex and Intelligent Group Limited, you can compare the effects of market volatilities on Marchex and Intelligent Group 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 Intelligent Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marchex and Intelligent Group.
Diversification Opportunities for Marchex and Intelligent Group
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Marchex and Intelligent is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Marchex and Intelligent Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intelligent Group 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 Intelligent Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intelligent Group has no effect on the direction of Marchex i.e., Marchex and Intelligent Group go up and down completely randomly.
Pair Corralation between Marchex and Intelligent Group
Given the investment horizon of 90 days Marchex is expected to generate 0.6 times more return on investment than Intelligent Group. However, Marchex is 1.66 times less risky than Intelligent Group. It trades about 0.05 of its potential returns per unit of risk. Intelligent Group Limited is currently generating about -0.09 per unit of risk. If you would invest 138.00 in Marchex on September 2, 2024 and sell it today you would earn a total of 44.00 from holding Marchex or generate 31.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 71.77% |
| Values | Daily Returns |
Marchex vs. Intelligent Group Limited
Performance |
| Timeline |
| Marchex |
| Intelligent Group |
Marchex and Intelligent Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marchex and Intelligent Group
The main advantage of trading using opposite Marchex and Intelligent Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marchex position performs unexpectedly, Intelligent Group 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 Intelligent Group will offset losses from the drop in Intelligent Group's long position.| Marchex vs. Entravision Communications | Marchex vs. Direct Digital Holdings | Marchex vs. Cimpress NV | Marchex vs. Townsquare Media |
| Intelligent Group vs. Mirriad Advertising plc | Intelligent Group vs. INEO Tech Corp | Intelligent Group vs. Kidoz Inc | Intelligent Group 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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