Correlation Between Gaia and Marcus

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

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

Diversification Opportunities for Gaia and Marcus

0.57

Correlation Coefficient

Gaia  Marcus

Very weak diversification

The 3 months correlation between Gaia and Marcus is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Gaia Inc and Marcus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marcus and Gaia 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 Gaia Inc are associated (or correlated) with Marcus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marcus has no effect on the direction of Gaia i.e., Gaia and Marcus go up and down completely randomly.

Pair Corralation between Gaia and Marcus

Given the investment horizon of 90 days Gaia Inc is expected to generate 1.56 times more return on investment than Marcus. However, Gaia is 1.56 times more volatile than Marcus. It trades about -0.03 of its potential returns per unit of risk. Marcus is currently generating about -0.13 per unit of risk. If you would invest  444.00  in Gaia Inc on December 28, 2024 and sell it today you would lose (44.00) from holding Gaia Inc or give up 9.91% of portfolio value over 90 days.

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

Gaia Inc  vs.  Marcus

Gaia Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gaia Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Marcus

Risk-Adjusted Performance

Very Weak

Over the last 90 days Marcus has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Gaia and Marcus

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

The idea behind Gaia Inc and Marcus 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.