Correlation Between OLB and Marin Software
Can any of the company-specific risk be diversified away by investing in both OLB and Marin Software 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 OLB and Marin Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OLB Group and Marin Software, you can compare the effects of market volatilities on OLB and Marin Software 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 OLB with a short position of Marin Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of OLB and Marin Software.
Diversification Opportunities for OLB and Marin Software
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between OLB and Marin is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding OLB Group and Marin Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marin Software and OLB 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 OLB Group are associated (or correlated) with Marin Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marin Software has no effect on the direction of OLB i.e., OLB and Marin Software go up and down completely randomly.
Pair Corralation between OLB and Marin Software
Considering the 90-day investment horizon OLB Group is expected to under-perform the Marin Software. In addition to that, OLB is 3.73 times more volatile than Marin Software. It trades about -0.04 of its total potential returns per unit of risk. Marin Software is currently generating about 0.1 per unit of volatility. If you would invest 216.00 in Marin Software on August 31, 2024 and sell it today you would earn a total of 12.00 from holding Marin Software or generate 5.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
OLB Group vs. Marin Software
Performance |
| Timeline |
| OLB Group |
| Marin Software |
OLB and Marin Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OLB and Marin Software
The main advantage of trading using opposite OLB and Marin Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OLB position performs unexpectedly, Marin Software 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 Marin Software will offset losses from the drop in Marin Software's long position.The idea behind OLB Group and Marin Software 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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