Correlation Between Marcus Millichap and Star Holdings

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

Diversification Opportunities for Marcus Millichap and Star Holdings

-0.54
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Marcus and Star is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Marcus Millichap and Star Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Star Holdings and Marcus Millichap 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 Millichap are associated (or correlated) with Star Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Star Holdings has no effect on the direction of Marcus Millichap i.e., Marcus Millichap and Star Holdings go up and down completely randomly.

Pair Corralation between Marcus Millichap and Star Holdings

Considering the 90-day investment horizon Marcus Millichap is expected to generate 0.92 times more return on investment than Star Holdings. However, Marcus Millichap is 1.09 times less risky than Star Holdings. It trades about 0.01 of its potential returns per unit of risk. Star Holdings is currently generating about -0.04 per unit of risk. If you would invest  4,006  in Marcus Millichap on September 12, 2024 and sell it today you would earn a total of  88.00  from holding Marcus Millichap or generate 2.2% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Marcus Millichap  vs.  Star Holdings

 Performance 
       Timeline  
Marcus Millichap 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Marcus Millichap are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating primary indicators, Marcus Millichap may actually be approaching a critical reversion point that can send shares even higher in January 2025.
Star Holdings 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Star Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Marcus Millichap and Star Holdings Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Marcus Millichap and Star Holdings

The main advantage of trading using opposite Marcus Millichap and Star Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marcus Millichap position performs unexpectedly, Star Holdings 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 Star Holdings will offset losses from the drop in Star Holdings' long position.
The idea behind Marcus Millichap and Star Holdings 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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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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