Correlation Between AMTD Digital and Marin Software

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

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

Diversification Opportunities for AMTD Digital and Marin Software

0.42

Correlation Coefficient

AMTD Digital  Marin Software

Very weak diversification

The 3 months correlation between AMTD and Marin is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding AMTD Digital and Marin Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marin Software and AMTD Digital 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 AMTD Digital are associated (or correlated) with Marin Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marin Software has no effect on the direction of AMTD Digital i.e., AMTD Digital and Marin Software go up and down completely randomly.

Pair Corralation between AMTD Digital and Marin Software

Considering the 90-day investment horizon AMTD Digital is expected to under-perform the Marin Software. But the stock apears to be less risky and, when comparing its historical volatility, AMTD Digital is 2.05 times less risky than Marin Software. The stock trades about 0.0 of its potential returns per unit of risk. The Marin Software is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  232.00  in Marin Software on October 7, 2024 and sell it today you would earn a total of  2.00  from holding Marin Software or generate 0.86% return on investment over 90 days.

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

AMTD Digital  vs.  Marin Software

AMTD Digital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AMTD Digital 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 forward-looking signals remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Marin Software

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Marin Software are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating forward indicators, Marin Software may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with AMTD Digital and Marin Software

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

The idea behind AMTD Digital and Marin Software 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.