Correlation Between Marchex and MGO Global
Can any of the company-specific risk be diversified away by investing in both Marchex and MGO Global 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 MGO Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marchex and MGO Global Common, you can compare the effects of market volatilities on Marchex and MGO Global 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 MGO Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marchex and MGO Global.
Diversification Opportunities for Marchex and MGO Global
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Marchex and MGO is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Marchex and MGO Global Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MGO Global Common 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 MGO Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MGO Global Common has no effect on the direction of Marchex i.e., Marchex and MGO Global go up and down completely randomly.
Pair Corralation between Marchex and MGO Global
Given the investment horizon of 90 days Marchex is expected to generate 7.65 times less return on investment than MGO Global. But when comparing it to its historical volatility, Marchex is 8.45 times less risky than MGO Global. It trades about 0.05 of its potential returns per unit of risk. MGO Global Common is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 447.00 in MGO Global Common on September 2, 2024 and sell it today you would lose (213.00) from holding MGO Global Common or give up 47.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marchex vs. MGO Global Common
Performance |
| Timeline |
| Marchex |
| MGO Global Common |
Marchex and MGO Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marchex and MGO Global
The main advantage of trading using opposite Marchex and MGO Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marchex position performs unexpectedly, MGO Global 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 MGO Global will offset losses from the drop in MGO Global's long position.| Marchex vs. Entravision Communications | Marchex vs. Direct Digital Holdings | Marchex vs. Cimpress NV | Marchex vs. Townsquare Media |
| MGO Global vs. ADTRAN Inc | MGO Global vs. Belden Inc | MGO Global vs. ADC Therapeutics SA | MGO Global vs. Comtech Telecommunications Corp |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |