Correlation Between Marcus and Rough Rice

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Can any of the company-specific risk be diversified away by investing in both Marcus and Rough Rice 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 Rough Rice into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marcus and Rough Rice Futures, you can compare the effects of market volatilities on Marcus and Rough Rice 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 Rough Rice. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marcus and Rough Rice.

Diversification Opportunities for Marcus and Rough Rice

0.49
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Marcus and Rough is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Marcus and Rough Rice Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rough Rice Futures 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 Rough Rice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rough Rice Futures has no effect on the direction of Marcus i.e., Marcus and Rough Rice go up and down completely randomly.

Pair Corralation between Marcus and Rough Rice

Considering the 90-day investment horizon Marcus is expected to under-perform the Rough Rice. In addition to that, Marcus is 1.9 times more volatile than Rough Rice Futures. It trades about -0.21 of its total potential returns per unit of risk. Rough Rice Futures is currently generating about -0.07 per unit of volatility. If you would invest  1,447  in Rough Rice Futures on December 11, 2024 and sell it today you would lose (53.00) from holding Rough Rice Futures or give up 3.66% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy95.24%
ValuesDaily Returns

Marcus  vs.  Rough Rice Futures

 Performance 
       Timeline  
Marcus 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Marcus has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
Rough Rice Futures 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Rough Rice Futures has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Commodity's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for Rough Rice Futures shareholders.

Marcus and Rough Rice Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Marcus and Rough Rice

The main advantage of trading using opposite Marcus and Rough Rice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marcus position performs unexpectedly, Rough Rice 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 Rough Rice will offset losses from the drop in Rough Rice's long position.
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The idea behind Marcus and Rough Rice Futures pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.

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