Correlation Between Socket Mobile and Marine Products
Can any of the company-specific risk be diversified away by investing in both Socket Mobile and Marine Products 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 Socket Mobile and Marine Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Socket Mobile and Marine Products, you can compare the effects of market volatilities on Socket Mobile and Marine Products 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 Socket Mobile with a short position of Marine Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Socket Mobile and Marine Products.
Diversification Opportunities for Socket Mobile and Marine Products
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Socket and Marine is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Socket Mobile and Marine Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marine Products and Socket Mobile 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 Socket Mobile are associated (or correlated) with Marine Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marine Products has no effect on the direction of Socket Mobile i.e., Socket Mobile and Marine Products go up and down completely randomly.
Pair Corralation between Socket Mobile and Marine Products
Given the investment horizon of 90 days Socket Mobile is expected to generate 2.89 times more return on investment than Marine Products. However, Socket Mobile is 2.89 times more volatile than Marine Products. It trades about 0.17 of its potential returns per unit of risk. Marine Products is currently generating about -0.08 per unit of risk. If you would invest 122.00 in Socket Mobile on September 13, 2024 and sell it today you would earn a total of 20.00 from holding Socket Mobile or generate 16.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Socket Mobile vs. Marine Products
Performance |
| Timeline |
| Socket Mobile |
| Marine Products |
Socket Mobile and Marine Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Socket Mobile and Marine Products
The main advantage of trading using opposite Socket Mobile and Marine Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Socket Mobile position performs unexpectedly, Marine Products 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 Products will offset losses from the drop in Marine Products' long position.| Socket Mobile vs. Cricut Inc | Socket Mobile vs. Nano Dimension | Socket Mobile vs. IONQ Inc | Socket Mobile vs. AGM Group Holdings |
| Marine Products vs. Clarus Corp | Marine Products vs. Escalade Incorporated | Marine Products vs. Johnson Outdoors | Marine Products vs. JAKKS Pacific |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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