Correlation Between Marcus and Paramount Global
Can any of the company-specific risk be diversified away by investing in both Marcus and Paramount 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 Marcus and Paramount Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marcus and Paramount Global, you can compare the effects of market volatilities on Marcus and Paramount 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 Marcus with a short position of Paramount Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marcus and Paramount Global.
Diversification Opportunities for Marcus and Paramount Global
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Marcus and Paramount is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Marcus and Paramount Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paramount Global and Marcus 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 Marcus are associated (or correlated) with Paramount Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paramount Global has no effect on the direction of Marcus i.e., Marcus and Paramount Global go up and down completely randomly.
Pair Corralation between Marcus and Paramount Global
Considering the 90-day investment horizon Marcus is expected to generate 0.6 times more return on investment than Paramount Global. However, Marcus is 1.65 times less risky than Paramount Global. It trades about 0.05 of its potential returns per unit of risk. Paramount Global is currently generating about -0.01 per unit of risk. If you would invest 1,588 in Marcus on August 27, 2024 and sell it today you would earn a total of 615.00 from holding Marcus or generate 38.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 31.85% |
| Values | Daily Returns |
Marcus vs. Paramount Global
Performance |
| Timeline |
| Marcus |
| Paramount Global |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Marcus and Paramount Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marcus and Paramount Global
The main advantage of trading using opposite Marcus and Paramount Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marcus position performs unexpectedly, Paramount 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 Paramount Global will offset losses from the drop in Paramount Global's long position.| Marcus vs. News Corp A | Marcus vs. Liberty Media | Marcus vs. Warner Music Group | Marcus vs. Fox Corp Class |
| Paramount Global vs. Paramount Global Class | Paramount Global vs. Qurate Retail | Paramount Global vs. ATT Inc |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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