Correlation Between Baosheng Media and Marchex

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

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

Diversification Opportunities for Baosheng Media and Marchex

-0.01

Correlation Coefficient

Baosheng Media  Marchex

Good diversification

The 3 months correlation between Baosheng and Marchex is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Baosheng Media Group and Marchex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marchex and Baosheng Media 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 Baosheng Media Group are associated (or correlated) with Marchex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marchex has no effect on the direction of Baosheng Media i.e., Baosheng Media and Marchex go up and down completely randomly.

Pair Corralation between Baosheng Media and Marchex

Given the investment horizon of 90 days Baosheng Media Group is expected to generate 12.83 times more return on investment than Marchex. However, Baosheng Media is 12.83 times more volatile than Marchex. It trades about 0.1 of its potential returns per unit of risk. Marchex is currently generating about 0.04 per unit of risk. If you would invest  161.00  in Baosheng Media Group on December 5, 2024 and sell it today you would earn a total of  60.00  from holding Baosheng Media Group or generate 37.27% return on investment over 90 days.

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

Baosheng Media Group  vs.  Marchex

Baosheng Media Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Baosheng Media Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Baosheng Media unveiled solid returns over the last few months and may actually be approaching a breakup point.

Marchex

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Marchex are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady technical indicators, Marchex may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Baosheng Media and Marchex

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

The idea behind Baosheng Media Group and Marchex 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.