Correlation Between Der International and Markor International

Can any of the company-specific risk be diversified away by investing in both Der International and Markor International 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 Der International and Markor International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Der International Home and Markor International Home, you can compare the effects of market volatilities on Der International and Markor International 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 Der International with a short position of Markor International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Der International and Markor International.

Diversification Opportunities for Der International and Markor International

0.87

Correlation Coefficient

Der International  Markor International

Very poor diversification

The 3 months correlation between Der and Markor is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Der International Home and Markor International Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Markor International Home and Der International 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 Der International Home are associated (or correlated) with Markor International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Markor International Home has no effect on the direction of Der International i.e., Der International and Markor International go up and down completely randomly.

Pair Corralation between Der International and Markor International

Assuming the 90 days trading horizon Der International Home is expected to generate 0.86 times more return on investment than Markor International. However, Der International Home is 1.16 times less risky than Markor International. It trades about 0.1 of its potential returns per unit of risk. Markor International Home is currently generating about 0.08 per unit of risk. If you would invest  480.00  in Der International Home on August 31, 2024 and sell it today you would earn a total of  51.00  from holding Der International Home or generate 10.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Der International Home  vs.  Markor International Home

Der International Home

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Der International Home are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Der International sustained solid returns over the last few months and may actually be approaching a breakup point.

Markor International Home

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Markor International Home are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Markor International sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Der International and Markor International

The main advantage of trading using opposite Der International and Markor International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Der International position performs unexpectedly, Markor International 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 Markor International will offset losses from the drop in Markor International's long position.

The idea behind Der International Home and Markor International Home 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.

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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.