Correlation Between PACCAR and Marine Bancorp
Can any of the company-specific risk be diversified away by investing in both PACCAR and Marine Bancorp 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 PACCAR and Marine Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PACCAR Inc and Marine Bancorp of, you can compare the effects of market volatilities on PACCAR and Marine Bancorp 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 PACCAR with a short position of Marine Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of PACCAR and Marine Bancorp.
Diversification Opportunities for PACCAR and Marine Bancorp
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between PACCAR and Marine is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding PACCAR Inc and Marine Bancorp of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marine Bancorp and PACCAR 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 PACCAR Inc are associated (or correlated) with Marine Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marine Bancorp has no effect on the direction of PACCAR i.e., PACCAR and Marine Bancorp go up and down completely randomly.
Pair Corralation between PACCAR and Marine Bancorp
Given the investment horizon of 90 days PACCAR Inc is expected to under-perform the Marine Bancorp. In addition to that, PACCAR is 2.93 times more volatile than Marine Bancorp of. It trades about -0.31 of its total potential returns per unit of risk. Marine Bancorp of is currently generating about 0.13 per unit of volatility. If you would invest 3,960 in Marine Bancorp of on October 7, 2024 and sell it today you would earn a total of 40.00 from holding Marine Bancorp of or generate 1.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PACCAR Inc vs. Marine Bancorp of
Performance |
| Timeline |
| PACCAR Inc |
| Marine Bancorp |
PACCAR and Marine Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PACCAR and Marine Bancorp
The main advantage of trading using opposite PACCAR and Marine Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PACCAR position performs unexpectedly, Marine Bancorp 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 Marine Bancorp will offset losses from the drop in Marine Bancorp's long position.The idea behind PACCAR Inc and Marine Bancorp of 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.| Marine Bancorp vs. Eurobank Ergasias Services | Marine Bancorp vs. Nedbank Group | Marine Bancorp vs. Standard Bank Group | Marine Bancorp vs. Bank Central Asia |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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