Correlation Between Marin Software and Dotdigital Group
Can any of the company-specific risk be diversified away by investing in both Marin Software and Dotdigital Group 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 Dotdigital Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marin Software and dotdigital Group Plc, you can compare the effects of market volatilities on Marin Software and Dotdigital Group 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 Dotdigital Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marin Software and Dotdigital Group.
Diversification Opportunities for Marin Software and Dotdigital Group
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Marin and Dotdigital is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Marin Software and dotdigital Group Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on dotdigital Group Plc 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 Dotdigital Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of dotdigital Group Plc has no effect on the direction of Marin Software i.e., Marin Software and Dotdigital Group go up and down completely randomly.
Pair Corralation between Marin Software and Dotdigital Group
Given the investment horizon of 90 days Marin Software is expected to generate 1.65 times more return on investment than Dotdigital Group. However, Marin Software is 1.65 times more volatile than dotdigital Group Plc. It trades about 0.05 of its potential returns per unit of risk. dotdigital Group Plc is currently generating about -0.04 per unit of risk. If you would invest 205.00 in Marin Software on September 14, 2024 and sell it today you would earn a total of 5.00 from holding Marin Software or generate 2.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marin Software vs. dotdigital Group Plc
Performance |
| Timeline |
| Marin Software |
| dotdigital Group Plc |
Marin Software and Dotdigital Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marin Software and Dotdigital Group
The main advantage of trading using opposite Marin Software and Dotdigital Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marin Software position performs unexpectedly, Dotdigital Group 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 Dotdigital Group will offset losses from the drop in Dotdigital Group's long position.The idea behind Marin Software and dotdigital Group Plc 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.| Dotdigital Group vs. TrackX Holdings | Dotdigital Group vs. Generative AI Solutions | Dotdigital Group vs. eGain | Dotdigital Group vs. Marin Software |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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