Correlation Between Marine Products and Neogen
Can any of the company-specific risk be diversified away by investing in both Marine Products and Neogen 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 Marine Products and Neogen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marine Products and Neogen, you can compare the effects of market volatilities on Marine Products and Neogen 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 Marine Products with a short position of Neogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marine Products and Neogen.
Diversification Opportunities for Marine Products and Neogen
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Marine and Neogen is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Marine Products and Neogen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neogen and Marine Products 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 Marine Products are associated (or correlated) with Neogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neogen has no effect on the direction of Marine Products i.e., Marine Products and Neogen go up and down completely randomly.
Pair Corralation between Marine Products and Neogen
Considering the 90-day investment horizon Marine Products is expected to generate 0.57 times more return on investment than Neogen. However, Marine Products is 1.76 times less risky than Neogen. It trades about 0.18 of its potential returns per unit of risk. Neogen is currently generating about -0.01 per unit of risk. If you would invest 928.00 in Marine Products on September 2, 2024 and sell it today you would earn a total of 61.00 from holding Marine Products or generate 6.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marine Products vs. Neogen
Performance |
| Timeline |
| Marine Products |
| Neogen |
Marine Products and Neogen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marine Products and Neogen
The main advantage of trading using opposite Marine Products and Neogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marine Products position performs unexpectedly, Neogen 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 Neogen will offset losses from the drop in Neogen's long position.| Marine Products vs. LCI Industries | Marine Products vs. MCBC Holdings | Marine Products vs. Winnebago Industries | Marine Products vs. Thor Industries |
| Neogen vs. Qiagen NV | Neogen vs. Aclaris Therapeutics | Neogen vs. IQVIA Holdings | Neogen vs. Medpace Holdings |
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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