Correlation Between Marwyn Value and NOW
Can any of the company-specific risk be diversified away by investing in both Marwyn Value and NOW 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 Marwyn Value and NOW into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marwyn Value Investors and NOW Inc, you can compare the effects of market volatilities on Marwyn Value and NOW 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 Marwyn Value with a short position of NOW. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marwyn Value and NOW.
Diversification Opportunities for Marwyn Value and NOW
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Marwyn and NOW is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Marwyn Value Investors and NOW Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NOW Inc and Marwyn Value 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 Marwyn Value Investors are associated (or correlated) with NOW. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NOW Inc has no effect on the direction of Marwyn Value i.e., Marwyn Value and NOW go up and down completely randomly.
Pair Corralation between Marwyn Value and NOW
Assuming the 90 days trading horizon Marwyn Value Investors is expected to generate 0.24 times more return on investment than NOW. However, Marwyn Value Investors is 4.19 times less risky than NOW. It trades about 0.02 of its potential returns per unit of risk. NOW Inc is currently generating about -0.07 per unit of risk. If you would invest 10,350 in Marwyn Value Investors on January 15, 2025 and sell it today you would earn a total of 50.00 from holding Marwyn Value Investors or generate 0.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.67% |
| Values | Daily Returns |
Marwyn Value Investors vs. NOW Inc
Performance |
| Timeline |
| Marwyn Value Investors |
| NOW Inc |
Marwyn Value and NOW Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marwyn Value and NOW
The main advantage of trading using opposite Marwyn Value and NOW positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marwyn Value position performs unexpectedly, NOW 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 NOW will offset losses from the drop in NOW's long position.| Marwyn Value vs. Ebro Foods | Marwyn Value vs. Coeur Mining | Marwyn Value vs. British American Tobacco | Marwyn Value vs. Premier Foods PLC |
| NOW vs. Fevertree Drinks Plc | NOW vs. Heavitree Brewery | NOW vs. Aeorema Communications Plc | NOW vs. Zegona Communications Plc |
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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