Correlation Between Marin Software and BSQUARE
Can any of the company-specific risk be diversified away by investing in both Marin Software and BSQUARE 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 Marin Software and BSQUARE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marin Software and BSQUARE, you can compare the effects of market volatilities on Marin Software and BSQUARE 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 Marin Software with a short position of BSQUARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marin Software and BSQUARE.
Diversification Opportunities for Marin Software and BSQUARE
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Marin and BSQUARE is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Marin Software and BSQUARE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BSQUARE and Marin Software 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 Marin Software are associated (or correlated) with BSQUARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BSQUARE has no effect on the direction of Marin Software i.e., Marin Software and BSQUARE go up and down completely randomly.
Pair Corralation between Marin Software and BSQUARE
Given the investment horizon of 90 days Marin Software is expected to generate 3.06 times less return on investment than BSQUARE. In addition to that, Marin Software is 3.71 times more volatile than BSQUARE. It trades about 0.0 of its total potential returns per unit of risk. BSQUARE is currently generating about 0.04 per unit of volatility. If you would invest 112.00 in BSQUARE on September 13, 2024 and sell it today you would earn a total of 10.00 from holding BSQUARE or generate 8.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 29.29% |
| Values | Daily Returns |
Marin Software vs. BSQUARE
Performance |
| Timeline |
| Marin Software |
| BSQUARE |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Marin Software and BSQUARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marin Software and BSQUARE
The main advantage of trading using opposite Marin Software and BSQUARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marin Software position performs unexpectedly, BSQUARE 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 BSQUARE will offset losses from the drop in BSQUARE's long position.The idea behind Marin Software and BSQUARE 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.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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |